This blog explains which c-Si technologies are likely to be applied to manufacture c-Si cells used within shipped modules for new PV demand during 2013. It also provides an update to the persistent industry debate surrounding PV technology roadmaps, and discusses why the whole issue of road mapping is often taken out of context within the PV industry.
The relationship between corporate strategies and PV technologies is reviewed in an attempt to explain why PV technologies are not being prioritised fully today despite many different roadmaps and technologies being championed.
Finally, by examining module supply and demand activity from a bottom-up perspective for 2013 - and factoring in the specific cell-to-module supply-chains in play - the expected technology distribution of c-Si cell production demand in the 30-31 GW range during 2013 is provided.
Ultimately, the narrative and graphic here are intended to provide the starting point to a year during which the relevance of PV technology is anticipated to shift from one of secondary to primary importance, and a year that may close out with a new PV technology roadmap emerging that has strong industry buy-in and pertinence.
There are limited options today for PV manufacturers to create a differentiated proposition within the PV industry. In fact, when scanning through the alternatives on view, technology is all too often seen to take a back seat.
The options pursued by PV manufacturers to create a unique proposition vary somewhat in complexity and subtlety. Indeed, many readers may question what role these strategies actually have within a PV technology roadmap.
However, by understanding these strategies, it is possible to see why technology has been relegated within the current PV climate, and what needs to change before technology can come to the fore again within the industry.
At one extreme of the differentiated propositions being pursued, we have the ‘brute force’ (or ‘bull-in-a-china-shop’) approach. Here, technology is not a really a ‘driving’ force, but simply has to meet minimum industry requirements to satisfy module power ratings.
Within the ‘bull-in-a-china-shop’ approach, the key ingredient is credit availability with ‘market share at any cost’ forming the prevailing line of attack, typically on a global scale and with strong corporate backing.
But there are lots of other strategic approaches that are largely technology-agnostic. These include domestic market-share protectionism (by pursuing the trade barrier route), or the reliance on sponsorship and marketing to create perceived brand superiority.
And as other approaches are reviewed, it becomes increasingly difficult to find many clear examples where technology is playing a leading role in corporate strategies. In fact, it is hard to see which strategies are really focused on the ‘W’ part in the industry’s heartbeat signature, US$/W, aside from the (in-house cell making) efficiency roadmaps of First Solar and SunPower.
However, technology does remain the only route through which efficiency enhancements can be used to move the PV industry forward. And as such, it is perhaps the only way that the upstream segments (from poly to module manufacturing) can hope for a sustained period of positive operating margins over the next 3-5 years.
Before we get into what PV technology actually is, it is important to state what PV technology is not.
• First, technology progress is not achieved by operating within an oversupply environment that allows you to bin below-spec product, so that the resulting distributions appear as though something new has been done from a processing standpoint.
• Setting up an R&D lab and producing limited runs of hero wafers/cells/modules, and accompanying this with polished datasheets or trade-show displays, does not count either.
• Hammering out costs (direct or indirect) is not the same as moving technology forward. Cost reduction is normal, as is squeezing your suppliers on price/delivery, and is separate to technology innovation.
• Technology roadmaps should not be the exclusive domain of academic or R&D labs, with process flow variants that are typically biased to their respective funding schemes.
• Technology roadmaps should not be configured as a vehicle to encourage funding schemes or to justify the business case for VC funds going into regional or domestic based start-up companies.
• Finally, PV roadmaps should not be created simply as a source of investor relations sound-bites, to convince the outside world that a credible technology path is under control.
However, while there have been way too many ulterior motives influencing PV technology roadmaps, the saving grace for the PV industry is that - until now - PV technology roadmaps have not been essential.
Now, while this may come across as a surprise or confusing to many, the good news for all technology-custodians is that a roadmap will definitely matter to the PV industry soon. And by this time, getting the roadmap right will be incredibly important for all segments of the PV value and supply-chains.
While the PV industry was heavily subsidized - and generous European feed-in-tariffs (FITs) propped up sufficient demand - almost anyone producing panels got business somewhere, somehow. With factory gate module ASPs at the US$3-4/W level back in 2007, any technology that was in use within an operating PV fab could legitimately lay claim to inclusion within one of the many PV technology roadmap variants of the day.
However, the prospects for industry-wide (and globally accepted) PV technology roadmaps have not been good so far. Attempts to impose roadmaps on a global basis have largely been discarded because corporate strategies have been founded upon capacity additions, mostly using technologies that were a copy of what already worked.
And, when the capacity deluge came online from Asia (in particular China) during 2010 and 2011, technology roadmaps didn’t come into play either. Capacity addition at this time was done using the lowest risk option (namely, to copy proven standard c-Si production steps with identical production tools), and get to the GW-level before your competitors hit that mark.
Of course, it is not true to say that technology roadmaps have played ‘no’ part at all in PV industry expansion phases until now. More that they have not played an ‘essential’ role that requires everyone to subscribe to, or else fear being left on the scrapheap of yesterday’s technology news. That’s the key issue here, and the fundamental reason why the PV industry has not yet needed to have a technology roadmap with cross-party agreement.
Of course, at some point, any strategy based on simply adding more of the same (capacity) comes to an end. And of course, within any oversupplied and fiercely competitive low-ASP environment, only a fraction of the former technologies survive.
Throw in a shakeout phase, coupled with heavily financed global downstream expansions from the remaining market-share leaders, and let’s also assume all reasonable measures have been taken to remove costs from existing manufacturing stages of the value-chain.
The date is probably sometime late Q3’13. And almost by default, PV manufacturing has no place to turn to, except for real technology change.
From a technology perspective, the next 12 months can only be viewed as a ‘transition’ phase for the PV industry: a period when the remaining industry participants come to the conclusion that each having their own brand of technology roadmap is of no long-term value.
Not so much a case of survival-of-the-fittest, but more a case of the selfish-gene coming to prominence - helping others only because it helps your own prospects for longevity and survival.
The mere fact that over twenty different next-generation PV technology variants are all vying for headline status tells a story in its own right. It may be that the timing is not right for any of them. Or that some are no more than marketing hype of 2011/2012 gone wrong.
Indeed, there has been no shortage of outlets that have been forthcoming in assigning traffic-light colour-coded ‘hit’ or ‘miss’ labels to each of these schemes. (Maybe this is just another legacy artefact of cottage industry dynamics, where the mere creation of a datasheet PDF is taken as confirmation of technology maturity and mass production.)
As much as PV equipment suppliers or manufacturers would like to think their unique brand of technology will be the catalyst for roadmap inflection points that will have global ramifications, even they are at the mercy of supply/demand parameters and those that really call the shots.
Of course, the end-market (the real customers!) will continue to decide the technologies that the PV industry has to evolve to produce. Not because end-users know or should know PV technologies, but because they buy what they need and within the PV world, that means specific W and US$ numbers being hit with guaranteed quality metrics in place.
While polysilicon, ingot, wafer and module R&D personnel can each make a good case for technology importance, it remains the c-Si cell stage (or the FEOL thin-film portion) that calls the shots in terms of PV technology. For the c-Si value-chain, this includes the grade of polysilicon needed, how the ingots should be made, and what the wafers should look like (on the outside and inside).
Therefore, projecting PV technology based upon cell production levels over the next 12 months is actually the only real way of forecasting PV technology today with any level of certainty and accuracy.
Note also that there is no value in reviewing PV capacity equipment spending during 2013 as a guide to how the PV technology roadmap will unfold in the next 12 months.
CapEx levels during 2013 are unlikely to be sufficient enough to allow any meaningful trends to be extracted, and the PV industry has yet to mature enough that technology buy cycles follow automatically whenever book-to-bill ratios dip below parity.
Therefore, spelling out what c-Si cell production (not capacity and not CapEx) will be comprised of in 2013 is the closest anyone is going to get to understanding PV technologies in the near term.
For simplicity and to keep numbers round, let’s assume 30-35 GW of end-market module demand for 2013, of which 90-95% is supplied by c-Si based technologies. And let’s put aside being too clever on thin-film technologies, bearing in mind the contribution that First Solar and Solar Frontier will make to the non-c-Si demand portion, and the downstream focus of the business models pursued by these two companies.
Let’s also assume we don’t have any excessive inventory levels at the start or end of 2013 that would materially affect the c-Si production levels needed across the year. Give or take a GW here or there, this implies we need about 30-31GW of c-Si cells to be produced during 2013. (Better clarity will be available on this in a few months time.)
Looking more closely now at where this 30-31 GW of c-Si demand is located and the country/application-specific demands in terms of module specification and supply-chain, and it is relatively easy to map out what type of modules will ship where, when and from whom.
Finally, we track back to who is making the c-Si cells that are going into this spread of market-driven module demand, and what process flows are being used by each of the cell makers in question. And then we have the real PV technology breakdown for 2013. Not the long-term roadmap by any means, but one that can be touched and measured against real world demand over the next four quarters.
We continue to use the nomenclature and classifications/groupings for c-Si cell technologies that we introduced a couple of years back. There are still over 100 different c-Si cell process flow options to choose from, so grouping these sensibly is a key step in assessing the direct impact on upstream and downstream channels and on PV equipment suppliers.
Obviously, looking at the expected breakdown for 2013 (see figure 1, top left on this page) reveals a number of trends beyond the legacy academic split into mono and multi substrates. In fact, each of these trends would be best served through separate analysis and commentary. And whether the shares assigned to some of these technology variants in 2013 are short-term trends indicative of demand pull from specific geographies, or part of longer term roadmap directions being pursued.
During 2013, there will be no shortage of opinions as to where PV technology is going next and who or what will be driving this. Nor will there be any shortage of roadmaps in evidence. Regardless however, every one of these roadmaps needs to reconcile the real-world technologies spelled out within the above figure here, as this remains the only tangible way of linking PV technologies with end-user adoption and trends over the next 12 months.
Every few months, NPD Solarbuzz intends to release headline summaries on PV technology trends to help explain exactly how the PV technology roadmap is coming together during 2013. Each quarter, a graphic (similar to the one attached on this page) from the NPD Solarbuzz “PV Equipment Quarterly” report will be shown and its implications discussed in detail