PV Industry Set for Fast Growth— with Bumps
The solar PV market will be worth a forecasted $150 billion by 2015, with about half of the market dominated by thin film technologies, according to speakers at the SEMI Silicon Valley Lunch Forum on September 18.
The overall PV market will grow at a compound annual growth rate of 73 percent from 2007 through 2011, with crystalline silicon growing at 69 percent and thin film at 101 percent, according to market data presented by Oerlikon Solar. The thin film equipment market will offer strong opportunities over the next five years, growing from $1.3 billion in 2006 to a forecasted $13 billion by 2011.
However, crystalline silicon technology will remain the PV market leader in the near future. “Thin film will grow very fast but I think it will struggle to dominate over crystalline silicon in this short time frame,” said Mark Thirsk, managing partner, Linx Consulting.
Thin film technologies began gaining share over the past two years primarily because of the silicon shortage, according to Paula Mints, principal analyst with Navigant Consulting.
“The shortage, and demand side anxiety over module supply, gave thin films an opportunity to overcome market wariness of lower efficiency and potential lower reliability,” she said. However, silicon supply constraints are easing and by late 2009 significant raw material supplies will be coming online, according to Navigant.
Speakers at the lunch forum highlighted the economic challenges ahead in growing the solar industry.
“The name of the game for solar PV is to get the cost down to a point where solar is delivering energy at a level that is competitive with other renewable energy technologies,” said Chris O’Brien, head of market development, North America, for Oerlikon Solar. He noted that solar PV has some inherent advantages over other renewable technologies. For one, it’s not limited to large, central generating plants and can be deployed on warehouse and residential rooftops where no transmission is required. Solar also tends to produce the highest energy during periods of peak demand.
Thirsk of Linx Consulting pointed out that it’s going to be a “bumpy road” to grid parity. “Spain has withdrawn some of their subsidies, Germany’s changing their programs [and] we’ve got to get the tax credit through in the U.S.,” he said. “We need to keep these subsidies going to bridge to grid parity.”
Linx Consulting estimated that the 2008 market for solar/PV materials – not including silicon -- was worth well over $1 billion. After silicon, metals and pastes are the second biggest materials cost for crystalline silicon production.
Thirsk noted that most materials were in oversupply at the moment and therefore availability of materials should not be a constraint on installation of PV panels. “New materials are allowing us to capture more light, convert that light to electricity and get more power out of these cells,” said Thirsk. “For materials suppliers I’d encourage you to look at this market as an opportunity to innovate rather than just sell more material.”
The U.S. position in solar PV shipments has quickly eroded. In 2007, the U.S. had an eight percent share of global shipments, down from 42 percent in 1997, according to Navigant Consulting. “Manufacturing follows the market and low cost areas of production,” said analyst Mints. “The U.S. has few, if any, manufacturing incentives to lower the cost of production.” The market leaders for PV shipments are Europe, following by “Rest of the World” (ROW) and Japan.
On September 23— five days after the SEMI Lunch Forum— the U.S. Senate renewed the solar tax credit, much to the relief of the American PV industry. The Senate passed Bill H.R. 6049 (by a vote of 93-2) which amends the Internal Revenue Code of 1986 to “provide incentives for energy production and conservation, to extend certain expiring provisions, to provide individual income tax relief, and for other purposes.” The Senate added the bill to the Renewable Energy and Job Creation Act, which the U.S. House of Representatives passed in May. The House still needs to approve the Senate version of the bill before it can go to President George Bush for his approval. The tax credit, which expired last December, can cover up to 20% of qualified R&D spending.