One of the biggest pressures that the solar module industry faces is the ability to produce a solar module at a lower cost. Due to this demand in pricing, IMS Research has concluded that over 70% of module production capacity is made in Asia as of 2010’s fourth quarter. The trend to move production to Asia isn’t a passing one as IMS foresees that by the end of 2011, over 75% of the world’s PV production will take place in Asia.
IMS acknowledged that 2010 has been a good year for the module industry yielding strong demand, an increase in shipments and a curb in pricing demand. Conversely, as the industry prepares to enter 2011, IMS points to signs that the German market is dampening while PV suppliers throughout the industry turning their attention more frequently towards bringing down the cost of manufacturing modules.
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As a result, suppliers are moving their production to Asia, where costs for producing modules bear a significantly lower cost. Using REC as an example, IMS highlighted that the company’s fully-automated Singapore-based wafer, cell and module production lines aim to make modules for €0.97 per watt by the end of 2011. Moreover, IMS cites Evergreen Solar who plans to produce modules at US$0.90 per watt at its Chinese facility by the end of 2012; a substantial change from its cost of producing the same modules at its US plant in 2010’s third quarter at US$1.88 per watt.
“It is essential that PV costs continue to decline in order for PV to become a more sustainable industry that is less reliant on subsidies, and seemingly inevitable that manufacturing will shift to Asia, much as it has done in almost every other high-volume electronics market.” commented PV Research Analyst, Sam Wilkinson (pictured). “Large Chinese manufacturers are currently leading the industry in crystalline PV module cost reduction and other Western suppliers are joining them, bymoving their own production to Asia,” Wilkinson concluded.
