Solar photovoltaic industry turns aggressive

Photovoltaic cell manufacturers have seriously stepped up their game, embarking on “aggressive” expansion plans and shipment targets for the year ahead.

There has been a huge surge in market demand in 2010, when the industry saw a rise of 139 percent. According to Solarbuzz, it now wants to create a $15.2 billion revenue opportunity for PV equipment suppliers during 2011. This is an increase of 41 percent Y/Y, according to the research company’s PV Equipment Quarterly report.

While Y/Y growth for c-Si equipment spending, including ingot, wafer, cell and module stages, in 2011 would amount to 31 percent, thin-film spending will grow by an impressive 71 percent.

A huge growth in the latter is due to a resurgence of investments in a-Si and CIGS technologies, which account for 78 percent of planned thin-film capacity expansions.

These came from aggressive schedules from top tier Chinese manufacturers and cell producers in Taiwan. The company said that in the past 12 months, manufacturers in China and Taiwan accounted for 82 percent of the $3.6 billion revenues allocated to new c-Si cell equipment worldwide.

Some companies leading the solar PV pack include JA Solar to 3 GW, Trina Solar to 1.9 GW, Neo Solar Power to 1.8 GW, and Jinko Solar to 1.5 GW.

And this industry looks set to get even bigger between now and Q1 2012, growing by 70 percent. There’s also a predicted 65 thin-film expansion phases due to go ahead now.

According to Finlay Colville , Senior Analyst at Solarbuzz, fab investments during 2011 are providing opportunities for the PV equipment supply-chain. He said these are “reflected in tool backlogs at the $1 billion level reported during Q1’11” by equipment leaders such as Applied Materials, Centrotherm, GT Solar and Meyer Burger.

Solarbuzz says that although capacity expansions are consistent with leading cell manufacturers guiding 2011 shipment growth rates of 55 percent, market demand is only predicted to increase by 12 percent.

The blame here lies with incentive tariff cuts, which will be put in place across major European markets and will cause an imbalance. This in turn will have a knock on affect on the equipment supply-chain, “starting with a reset of capacity growth plans during 2H’11”.

Along with lead times typically falling to around three to six months, 2012 will be hard hit.

During Q1’11, PV equipment spending reached another quarterly high of $3.7 billion. This spending cycle however, will peak in Q2’11, followed by a sharp decline from Q4’11. Solarbuzz said the decline will come as the industry “resets its expansion plans to meet the pending market downturn in 2H’11.”

Equipment suppliers at the top will be the hardest hit here with “an immediate decline in new order intake.”

However, suppliers of next-generation fab tools will do better, with new plans being laid out as existing backlogs are shipped during 1H’11. So strong Q1’11 revenues will be announced shortly.

There’s also good news with the company claiming that new orders will be received, as PV producers review their plans for 2012.

That said, further expansion by thin-film entrants will depend upon the success of initial fabs ramped up in 2011 and 2012 and as the equipment spending cycle approaches its downturn in 2H’11, new challenges will emerge for tool suppliers.

This includes the $750 million segment for PECVD tools used to deposit passivation layers and anti-reflecting coatings during c-Si cell formation.