PV manufacturing capacity expansion announcements in February reach 5.4GW

PV Tech’s preliminary analysis of global PV manufacturing capacity expansion announcements for February, 2016 have revealed over 5.4GW of planned future expansions.

PV Tech’s preliminary analysis of global PV manufacturing capacity expansion announcements for February 2016 have revealed over 5.4GW of planned future expansions.

Total expansion announcements include dedicated crystalline silicon solar cell, integrated solar cell and module assembly and dedicated module assembly. No thin-film announcements were made in the month, the fourth month in a row.

Total expansion announcements were down from January, which was the second highest reported (9.52GW) since the beginning of 2014, but up from more than 2.7GW in February, 2015. 

Announcements of dedicated solar cell capacity expansions reached 1.26GW in February, less than half the figure (2.57GW) in the previous month, while significantly higher than the 300MW announced in February 2015. 

Integrated cell and module planned expansions totalled 1.5GW, the same level reached in the previous month. 

Dedicated module assembly capacity expansions announced in February reached 2.72GW, down from 5.35GW announced in the previous month, yet significantly higher than the 765MW announced in February, 2014. 

PV manufacturing capacity expansion announcements in February reach 5.4GW

Dedicated module assembly capacity expansions announced in February reached 2.72GW, down from 5.35GW announced in the previous month, yet significantly higher than the 765MW announced in February, 2014.

Overall capacity expansion announcements in 2016 are tracking significantly higher than in the prior-year period, driven by several announcements in the multi-gigawatt range. However, these (LG Electronics, Essel Infra/GCL and Jinneng Group/SunEdison) are mainly phased expansions over a number a years. 

On a geographical basis, capacity expansion announcements continue to be broadly based. In February, 2016 only two announcements (Jinneng Group/SunEdison and GCL Systems) were located in China, though totalled 2.8GW. This compares with only one announcement in January (500MW) being located in China. 

Southeast Asia accounted for just over 1GW of planned expansions, while smaller announcements overall were located in Brazil (300MW), Algeria (120MW) and Italy (50MW). 

Also notable was the planned restart of solar cell production (200MW) at the former Solland Solar facility in the Netherlands by Trina Solar. Asian-based companies have been driving the acquisition of idled capacity in Europe over the last three years.

Overcapacity concerns

Based on a preliminary analysis, conversion of announced capacity expansions in February to effective capacity in 2016 is less than 500MW, while around 1GW could be converted to effective capacity in 2016 from announcements in the previous month. However, several announcements made in February are being closely monitored and should greater clarity emerge the conversion figure could top 3GW. 

Indeed, even in early March 2016 a total of 5.8GW of announced capacity expansions have been made, all of which are expected to become effective capacity by the end of 2016.

Preliminary analysis of all announcements made so far in 2016 indicate close to 10GW from a total of 20.8GW could become effective capacity this year. 

On a cumulative effective capacity basis from all integrated and dedicated module assembly announcements made since the beginning of 2014 through to the end of 2015, total module assembly capacity additions were expected to reach just over 13GW. (See chart below)

PV manufacturing capacity expansion announcements in February reach 5.4GW

On a cumulative effective capacity basis from all integrated and dedicated module assembly announcements made since the beginning of 2014 through to the end of 2015, total module assembly capacity additions were expected to reach just over 13GW.

However, the intensity and scale of recent announcements indicate a further 6.5GW of effective module assembly capacity could be added in 2016, bringing cumulative effective new nameplate module capacity at year-end to nearly 20GW, since the beginning of 2014. However, from a ramp rate modelling perspective, cumulative effective new module assembly capacity would reach 15GW in October and close to 16GW at year-end.

It should also be noted that cumulative effective module assembly capacity additions in 2014 and 2015 merely matched global PV end-market demand growth. Taking effective capacity additions modelled through to the end of 2016, from 2014 and 2015 announcements would have led to module shortages on market forecasts for 2016 ranging from 64GW to 69GW of demand. 

Considering that these figures are nameplate capacity rather than actual production figures, new effective module capacity continues to track 2016 end market demand forecasts. 

However, with module capacity lead times much shorter than for solar cells, imbalances are possible, potentially restricting module production later in 2016. 

Despite this potential development, concern remains that further large-scale module assembly announcements through the first-half of 2016 would tilt effective capacity into an overcapacity scenario. 

PV Tech has already highlighted that module assembly overcapacity in China, primarily for the Chinese market in 2016 is highly likely, though the implications outside China are muted. 

Concern of module oversupply to the US market in 2016 has also arisen in recent months and will be covered in a following analysis, shortly. 

Tags: c-si manufacturing, solar cell, pv modules, pv celltech

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