Photovoltaic Equipment: Business is Improving – Still Challenges to Cope With
By Dr. Florian Wessendorf, managing director, VDMA Photovoltaic Manufacturing
Manufacturers of photovoltaic machines, components and equipment have noticed rather positive economic impulses in the last quarters. Investment went mainly into retro-fit and up-grades of existing production lines. However, it became obvious that the gap between existing production capacities and the global demand for photovoltaic products is closing. As a consequence industry experts expect increased investment in new production lines in the coming months.
New investments in SEA countries – Positive momentum
The business with Asia continues to be the driver for the turnover development. China and Taiwan remain the leading markets for photovoltaic equipment. However, new investments have been reported from countries of the SEA-Group, especially Malaysia, the Philippines and Thailand. At the same time positive impulses come from the US and the Emerging Markets in Latin America, South Africa and the MENA-Region. Even India has gain momentum. The Indian Government intends to raise its targets under the National Solar Mission from 20 gigawatts (GW) to 100 GW by 2022. By the same time Indian authorities are going to support photovoltaic production made in India. Of course, this will have a positive impact for equipment manufactures.
Increasing incoming orders
2014 also shows a positive trend for incoming orders. Business with Asia dominated the PV machinery industry here as well. Despite the positive order development a loss of momentum with regard to incoming orders has to be realized towards the end of 2014. The effects of political decisions like subsidy programs, local-content-regulations as well as trade conflicts, protective tariffs remain difficult to assess for the industry. On the one hand protective tariffs stimulate strong market fluctuations on the other they offer chances for sales of production equipment in new markets. For the next 3-6 months the PV equipment industry expects a further increase in production equipment, production solutions and technology packages. The positive trend for PV equipment makers should not neglect that there are a couple of obstacles for the industry’s recovery. Surely one of the most urgent is competitiveness.
What measures can be taken to improve the competitiveness of PV equipment makers?
Competitiveness in photovoltaic production means innovation and cost-efficient production technology, high speed of innovation, quality and reliability together with ever lower costs. PV equipment makers provide efficient production equipment and thoroughly efficient processes to international customers. Attributes like "German Engineering" or “Made in the US” are regarded as synonymous with the highest quality, extreme precision and efficient automation. That's great. But will this hold on in future? The benchmark position of German and American PV equipment manufacturers compared to their international competitors is excellent. This is, of course, no law of nature. At the moment Chinese companies try hard to move from low-tech to high-tech in order to enter segments of the German machinery industry.
To cope with the challenging current business situation partnerships along the supply chain will gain momentum and increase the competitiveness. A new Asia-strategy for the western machinery industry is needed to respond to the efforts Chinese competitors are making at the moment. At the same time PV equipment supplier have to strengthen their position in markets outside China and develop emerging markets sustainably. To improve their competitiveness most industry experts recommend technology leadership, practical innovation management and close partnership with their costumers. Even industry / production 4.0 is one of the key words to boost competitiveness and added value for western technology drivers. Perspectives, challenges and solutions in this context are discussed at VDMA Photovoltaic Equipment’s general assembly on March 24, 2015. Detailed information as well as the agenda can be found here.