Over-supply clouds solar outlook

12 Aug 2009

Previously committed investments cause solar-cell manufacturing capacity to surge 56%, despite falling market-demand.

Global solar-cell manufacturing capacity is expected to grow 56% in 2009 to 17 GW. What's more, ramped capacity, which was only 2.3 GW in 2005, is forecast to register a compound annual growth rate of 49% to more than 42 GW in 2013. Those are the headline conclusions of a new quarterly study from DisplaySearch, a US-based technology consultancy specializing in displays and photovoltaics (PV).

"Despite PV module demand shrinking 17% in 2009, so much cell manufacturing equipment was ordered and installed over the past year that capacity is still expected to grow 56% this year," said Charles Annis, DisplaySearch vice-president of manufacturing research and author of the report.

"With demand and capacity moving in different directions," he added, "the PV industry is currently experiencing an enormous over-supply that is causing rapid price erosion and potentially setting the stage for the failure of multiple cell manufacturers, particularly companies pursuing a-Si [amorphous silicon] thin-film solar cells. The PV industry will begin working through this excess capacity as demand recovers next year and takes off in 2011 and beyond."

Other findings from the Q3 '09 Quarterly PV Cell Capacity Database & Trends Report include:

• Throughout 2006, Japan had the largest solar-cell production capacity. However, Chinese companies started to ramp up a host of facilities in 2005 and by 2007 had more solar-cell capacity online than any other country. China has continued to invest heavily in production facilities and accounted for about a third of the worldwide cell capacity in 2009.
• Between January 2008 and July 2009, approximately 11.4 GW of new solar-cell capacity was installed in fabs around the world. These previous investment commitments are the reason that capacity is continuing to grow 56% in 2009 despite falling demand.
• In 2005, 95% of solar-cell manufacturing capacity was for crystalline silicon solar cells and 5% for thin-film solar cells. In 2009, thin film will account for more than 20% of capacity. By 2013, thin-film technologies are forecast to account for as much as 30% of solar-cell capacity.
• In terms of capacity available for production in 2009, First Solar is the largest solar-cell manufacturer (with more than 1 GW of capacity). Q-Cells and Suntech are not far behind and essentially tied for second place. By 2013, these three companies plus JA Solar, Motech, REC, SunPower, Yingli, Showa Shell Solar (assuming it moves forward with a planned 1 GW fab), and Sharp are forecast to be the top 10 makers, with more than 16 GW or 38% of 2013 capacity.

For further information on the Q3 '09 Quarterly PV Cell Capacity Database & Trends Report, contact Charles Camaroto (tel +1 516 625 2452; e-mail contact@displaysearch.com).