Photovoltaic "technology is king" era is coming

NPDSolarbuzz's latest PV industry analysis points out that desperation has to take extreme measures. According to the opinion of this market research firm, first-tier PV manufacturers will be unified on a technology roadmap after 2013 to overcome the impact of overcapacity and drastically reduce costs.

When the entire industry encountered capacity constraints and gradually rose to the gigawatt level, the unified photovoltaic industry technology roadmap did not mention the agenda. Fast forward for a few years, large-scale overcapacity gave birth to a period of false prosperity, and also produced discussions about how the industry can survive. From this perspective, a variety of PV technology road maps have been created to reduce costs and increase conversion efficiency.

However, analysts at NPD Solarbuzz recently pointed out that any meaningful roadmap is driven by people who have invested money and people with leading technology competition, although not necessarily profitably or successfully occupying market share.

RayLian, an analyst at NPDSolarbuzz, said: “Before this, the photovoltaic industry pursued various types of c-Si and thin-film manufacturing technologies. This poses a huge challenge for photovoltaic equipment suppliers because they are not sure whether customers can become repeat customers. The current manufacturing turmoil has played a pivotal role in eliminating uncompetitive technologies."

The lack of a unified technology roadmap is similar to the ITR rules of the semiconductor industry. The lack of a targeted unified road map for the PV industry may lead to the failure of first-line manufacturers in the industry to increase their battery conversion efficiency to around 20%.

NPDSolarbuzz believes that only 15% of first-line manufacturers can produce batteries with 18% or more efficiency. If the roadmap is unified, this figure will rise rapidly, and by the end of 2015, 75% of first-line battery manufacturers will increase their product efficiency.

This will not only help reduce costs, curb price declines, but also eliminate industry excess capacity caused by the underlying manufacturers. It is difficult for these manufacturers to shift to the production of high-efficiency batteries, which will make them slower and not conducive to increase competitiveness.

The market research company believes that the current turmoil in the solar industry will reduce battery and film manufacturers from 400 in 2011 to less than 100 in 2016.

This will lead to the production of more than 60% of the battery of 20 first-line component manufacturers. By 2016, there will be only 13 manufacturers in the thin film sector with a capacity of more than 100MW.

However, the key issue is when a technology purchase cycle occurs, thereby supporting greater industry efforts to eliminate most of the excess capacity.

Lian added: “In 2012, the PV cost expenditure was limited to maintenance levels, and the short-term focus has shifted to a firm reduction of costs and recovery of corporate profits. However, by the middle of 2013, the cost of silicon and non-silicon will be the lowest in history. At this stage, Leading line c-Si leaders will focus on developing a new photovoltaic technology roadmap."

Obviously, this is not enough to allow the industry to invest in updating equipment, because the market research company also pays attention to the purchase of gigawatt-level unloading equipment during the 2010 and 2011 overspending, but it has not yet been installed due to the price drop caused by overcapacity.

According to NPD Solarbuzz, equipment needs to be dismantled and upgraded in order to increase efficiency so that they can be sold in the next round of purchases.

However, equipment vendors that have already established a foothold in the market should notice that new competitors have entered the market and peddled efficient tools.

The market research company pointed out that historically, c-Si battery deposition tools have led the highest average selling price, providing c-Si photovoltaic equipment suppliers with the best service market. The market for c-SiPECVD tools now dominated by Centrotherm and Roth & Rau (now a division of MeyerBurger) reached $880 million in 2011.

However, PV thin film deposition equipment is an attractive sector in the short term, and some tool suppliers may be involved in the 2014 c-Si deposition market competition.

Lian added: "When PV spending starts again, not only the type of tool will change, but also the market share will shift between suppliers. The first key result is to fully understand the timing and content of the PV technology roadmap. This roadmap will gradually surface in the first-line c-Si manufacturers next year."

In addition to the technology purchase process, the capacity purchase process will also expand within a few years, which will seriously undermine equipment companies that have focused extensively on the photovoltaic industry.

The harsh environment is expected to continue from 2012 to the first half of 2013. Only a small amount of production capacity in Taiwan (c-Si battery production line) and Japan (c-Si module production line) will increase.

The collective effort to implement the new PV roadmap can quickly and well absorb the current excess capacity and accelerate the end of a period of false prosperity that has never been seen in the photovoltaic industry.