by Paula Mints
Every year at this time lists of lessons learned during the previous year give way to lists of top ten PV manufacturers. It’s time to ask what these lists mean, and whether they have a purpose to the ongoing growth and health of the photovoltaic industry.
So Many Numbers, So Little Time
There is more than one way to size the photovoltaic industry and unfortunately, much of the time are the metrics are considered to be synonymous. The PV industry is sized by capacity, shipments, production, module assembly capacity, installations and grid connections. Since all of these metric describe something different, a host of misunderstandings can, and often do, arise. Many times a one-to-one relationship is assumed between installations and shipments. The difference between c-Si cell and thin film capacity and module assembly capacity is often misunderstood. The role of inventory is overlooked.
Many times the goal of sizing the PV industry is to announce continue growth, whether this growth is profitable or not. All industries suffer a similar fate in this regard; growth is prized, whether or not it is healthy growth.
Figure 1 presents various metrics used to size the PV industry. The metrics presented in Figure 1 are 2014 supply and demand inventory, module assembly capacity, commercial c-Si cell and thin film capacity, production, shipments from annual production, shipments + inventory and defective modules. In 2014, quality issues primarily with crystalline cells were found in modules that had been installed for, in some cases, over ten years. In some cases, replacement of these defective modules requires a system redesign.
Figure 1: 2014 PV Industry Metrics
Module assembly capacity, though not trivial, ramps up more quickly than c-Si or thin film capacity. Traditionally, the PV industry has had more module assembly capacity then c-Si cell and thin film manufacturing capacity. The size of the PV industry is limited by its semiconductor capacity. In 2014, the PV industry had ~50-GWp of module assembly capacity and 45.9-GWp of c-Si cell and thin film capacity. This means that in a perfect world at 100% utilization and without considering inventory, PV industry shipments could only amount to 45.9-GWp.
Manufacturers announcing quarterly and annual shipment data often (meaning, close to 100 percent of the time) do not differentiate between cell capacity and module assembly capacity. When these numbers are taken at face value the industry is oversized, often significantly. This is important for several reasons one business reason is that manufacturers establishing a strategic direction need to have an accurate understanding of the competitive landscape in which it operates.
Table 1 presents data for the top ten manufacturers (as of publication) for 2014. A final assessment will not be available until all shipment data are tallied. At that time, inventory from the previous year will be factored into the analysis.
The manufacturers in Table 1 had 2.7-GWp more module assembly capacity than c-Si cell and thin film manufacturing capacity. A manufacturer can only ship to the limit of its cell/thin film capacity + inventory in any given year. It is common practice for manufacturers to buy cells from other sources and assemble these cells in-house, including the resulting product in annual shipment numbers.
Table 1: 2014 Top Ten Manufacturers Shipment Estimate, Capacity, Module Assembly
One reason the annual top ten manufacturer list has lost meaning is that the buying and selling of cells/modules obscures an accurate count and sizing of the industry. Another reason the annual top ten manufacturer list has lost meaning is that for many years shipments were not profitable. Recognition of an unprofitable achievement does not support the worthwhile goal of establishing a healthy, thriving industry. Celebrating data that obscures the facts does not help new and established entrants understand the industry landscape in which they compete.
Top Ten PV Manufacturers Over Time
Today’s number one manufacturer may be out of business tomorrow or merge with another more nimble entity. Table 2 presents the top ten c-Si cell and thin film manufacturers from 2001 through the 2014 estimate. Sharp Solar was the number one manufacturer from 2001 through 2007. Sharp Solar has reduced capacity significantly overtime. Q-Cells was the number one manufacturer in 2008. Q-Cells c-Si business was acquired by Hanwha and its CIGS business was acquired by Hanergy. Other Q-Cells’ businesses are no longer operating. Suntech was the number one manufacturer in 2010 and 2011. Suntech declared bankruptcy.
Several manufacturers on the annual top ten list, such as Schott, AstroPower and BP Solar exited during trying (unprofitable) times.
Historically, and taken in context with what was happening at the time, the annual top ten list has much to teach and perhaps becomes more relevant over time. Beginning in 2004, the PV industry began to experience accelerated growth. This growth was driven by the EU Feed in Tariff. In 2005, high prices for polysilicon began to pressure crystalline manufacturers. During these days, investment in thin film technologies increased, the turnkey equipment concept was announced as the future of the industry and longtime participants without polysilicon contracts in place began to struggle.
In 2009, aggressive pricing from manufacturers in China began to pressure crystalline manufacturers in other regions and First Solar, a manufacture of CdTe panels was the first and only thin film manufacturer to lead the list. During 2011, 2012 and 2013, survival was the most important PV metric as low margins became impossible to hide. Many manufacturers ramped up during the early days of the EU FiTs, assuming that growth would continue unabated. Still, even during unprofitable times, those on the top ten list were recognized.
Table 2: Top Ten PV Manufacturers 2001 – 2014 Estimate
The top ten list is primarily useful in hindsight, offering lessons about what pitfalls to avoid and where caution might have forestalled failure. It is used most often as a marketing tool, and, when the data are obscured or are confusing, is of little use in that regard.
Paula Mints is founder of SPV Market Research, a classic solar market research practice focused on gathering data through primary research and providing analyses of the global solar industry. You can find her on Twitter @PaulaMints1 and read her blog here.
This article was originally published on RenewableEnergyWorld.com, and is republished with permission.
