NPD Solarbuzz expects PV equipment suppliers’ 2012 revenues to be in rapid retreat

Share on facebook
Facebook
Share on twitter
Twitter
Share on linkedin
LinkedIn
Share on reddit
Reddit
Share on email
Email

A broad range of PV equipment suppliers are expected to have reported record revenues for 2011, after a year of continued capacity expansions. However, this situation will be contrasted by significant cut-back in capital expenditure in 2012 as the PV industry struggles with overcapacity and falling prices, according to the latest NPD Solarbuzz PV Equipment Quarterly report.

With a significant focus on capacity expansions in China and Taiwan, NPD Solarbuzz noted that Asia-based equipment suppliers benefited greatly, often at the expense of Western-based firms with a long-standing history within the industry.

“The euphoria of announcing record revenues for 2011 is countered by the realization that much of the tooling shipped last year was stimulated by highly ambitious capacity expansion plans that were not underpinned by market demand,” noted Finlay Colville, senior analyst at NPD Solarbuzz. “Over-capacity reached chronic proportions across the c-Si value-chain during 2011 and only stronger than anticipated end-market demand in 2012 will mitigate a painful and severe equipment spending downturn.”

The market research firm highlights Japan-based wire-saw producer, Komatsu-NTC and an emerging group of Chinese tool suppliers that included (Fujian) Apollo, 48th Research Institute (CETC-48), (Zhejiang) Jinggong and Jingyuntong (JYT), which saw revenue grow significantly in 2011.

Collectively, the four Chinese companies noted by NPD Solarbuzz, posted a CAGR metric in excess of 200% for PV-specific equipment revenues covering the period from 2008 to 2011.

Many European equipment suppliers with a strong track record within the PV industry (Centrotherm, Meyer Burger, Schmid, RENA, Amtech-Tempress and DEK-Solar) were also forecast to post record PV tool revenues for 2011, while Applied Materials was expected to retain the top spot. Others, such as Centrotherm, Meyer Burger, Schmid, RENA, Amtech-Tempress and DEK-Solar) are also forecast to post record PV tool revenues for 2011.

However, NPD Solarbuzz noted that other European suppliers didn’t benefit from the capital spending as much as others. Notably, the market research firm said that market share eroded around 50% for the likes of Roth & Rau, Manz, ALD-Vacuum and PVA-TePla for 2011, when compared to this grouping’s PV share back in 2008.

NPD Solarbuzz said that China in particular continued to invest in turn-key a-Si lines, which supported revenue streams for Oerlikon and Apollo during the year. The market research firm expected this segment to continue to take bookings, though in lumpy levels.

Equipment spending decline

NPD Solarbuzz noted that it expected a significant fall in capital spending in 2012 and that equipment suppliers were at risk of experiencing year-on-year revenue declines in the 60-70% range, especially those exposed mostly to the c-Si ingot-to-module markets, which suffer greatly from overcapacity.

Technology buy cycle

According to Colville, the PV equipment that was shipped during 2011 is now contributing to a misleading (nameplate) capacity figure, which he believes is at the 50GW level. However, the reaction to overcapacity and falling prices meant that many production lines were shuttered completely or idled as industry average utilization rates are currently below 50%. Some of the equipment shipped last year still awaits tool installation after a market recovery. The result is that annualized, effective (or commercial), ramped capacity is actually closer to 30GW, according to the analyst.

Colville believes that the next round of capital spending, driven by tier 1 and some selected tier 2 players would not begin until sufficient confidence that end-market demand would exceed the 30GW mark.

Currently, Colville sees little for equipment suppliers to be optimistic about regarding 2012 business opportunities, though he noted that changes in the c-Si equipment road map point firmly to an increase in high-efficiency cell variants, with over 75% of capacity added during 2012, capable of producing panels with efficiency gains of 0.5% or more, compared to industry averages through 2011.

Colville told PV-Tech that about 30% of ramped c-Si cell capacity in the first quarter of 2012 was capable of producing cells with an efficiency delta above 0.5%. However, Colville believes that only 10% of the ramped capacity is truly in the high efficiency category, with SunPower and Sanyo still the only two manufacturers that have controllable yields.

“The trend of capex spend through 2012 is a combination of new concepts, line upgrades or line cannibalization where tooling delivered during 2H'11 is not used for new capacity but to enhance existing lines. Cell makers in Taiwan have a more systematic capex spend that is firmly rooted in yield enhancement and increasing the percentage of multicrystalline cells above the 16.8% threshold. This is as much about improved process control at the cell stage as it is with capex spent upstream to improve yield and quality of incoming wafers. Capex spend in 2012 still covers many options – highlighting the fact that roadmaps are simply based on commercial survival and not synergistic technology inflection points,” Colville told PV-Tech.

The NPD Solarbuzz analyst is sceptical of a real technology buy cycle taking hold, though didn’t rule out such a development. He noted that the stronger than expected Q1'12 demand may provide sufficient confidence to reschedule tier 1 expansion plans that were largely on ice, but noted that it was too early to tell whether this would be a technology-buy focus for higher efficiency products or a return to low-risk cost-prioritized products.

“Only a small portion of tier 1 producers' legacy lines has been retired during 2011. Therefore, spending too much time on what will happen to this capacity is of secondary importance,” noted Colville. “The tendency has been to reduce utilization across all lines, rather than taking individual lines offline. This allows a faster ramp when demand picks up for individual companies with strong downstream project sales.”

The market analyst thinks that as a result of the market dynamics, PV equipment suppliers were now searching for technology-buy customers that will both soften the revenue declines during 2012 and provide a clear indication of the process tool types to be prioritized from 2013.

“The strategic planning for PV equipment suppliers is now shifting to 2013 and beyond, with limited prospects for revenue upside in 2012,” added Colville. “Success will be provided to those suppliers that can align product portfolios with equipment process chains that are economic in the new low cost PV manufacturing environment.”
 

28 July 2021
LONGi has launched its Hi-MO N module, the company's first bifacial module with N-type TOPCon cells, designed to deliver ultra- high value and lower LCOE to utility-scale PV power plants. This PV TechTalk Product Series webinar will provide an overview of the module’s technology and how the introduction of n-type technologies will provide efficiency and performance gains for solar project developers.
19 August 2021
The utility-scale PV market is poised for exponential growth and yet the industry still has many fundamental opportunities to improve on standards and best practice. Tracker shade loss has been one of those topics that deserve more attention, but has been typically handled by derate factors rather than trying to accurately forecast the loss over the life of the system. Join Nextracker’s subject matter experts, Aron Dobos and Neelesh Umachandran, and Rounak Kharait, director of solar energy assessments at DNV, for a webinar about why shade modeling matters and recommendations on what the solar industry should do about it.
25 August 2021
Energy Next is a new industry exhibition focusing on the latest renewable energy and energy efficiency technology, which will be held for the first time in 2021 in Sydney, Australia alongside the Clean Energy Council’s Australian Clean Energy Summit, the peak gathering of leaders driving Australia's energy transformation. Organised by the same people behind Australia’s largest clean energy event, All-Energy Australia, Energy Next will give visitors two days of access to key suppliers in the industry, free-to-attend professional development and industry workshops, and networking opportunities to better understand clean energy issues and solutions and learn about the latest developments in this transformational, dynamic sector.
25 August 2021
The Intersolar Summit Brasil Nordeste takes place in Fortaleza, Brazil. It addresses leading local and international experts on solar power and renewable energy in the region. The Summit’s mission is to provide in-depth education, enable high-quality networking opportunities, expand the use of PV technologies at regional and national level and strengthen the local PV industry. The Intersolar Summit Brasil Nordeste is organized by Intersolar South America - Latin America’s largest exhibition and conference for the solar industry: Solar Promotion International GmbH, Pforzheim, Freiburg Management and Marketing International GmbH (FMMI) and Aranda Eventos & Congressos Ltda, São Paulo as co-organizer.
25 August 2021
Join us to hear directly from the CTOs and heads-of-research from the top-20 cell/wafer producers to the PV industry today. The event will focus on predicting the key metrics underpinning the next big shift to n-type with answers to the key questions: When will the transition to n-type happen? Which companies will be first to 10 GW capacity and production? Who will be the key equipment suppliers for the new production lines? Which n-type process flow/architecture will emerge as the front-runner? What will polysilicon purity and wafer thickness levels look like for optimized n-type manufacturing? What will the upstream poly/wafer supply-chain look like in 5 years from now?
26 August 2021
In this webinar, JA Solar will present its product portfolio based on the latest technologies to improve your PV projects, ensuring maximum reliability and performance. During the webinar we will receive insight from JA Solar about its solar technology roadmap and how the manufacturer is providing customers with innovative solutions to suit their needs, while we will also analyse how to determine the best product solution for each solar project.

Read Next

July 27, 2021
Greek industrial group Mytilineos recorded a net profit of €77 million (US$91 million) in H1 2021, however the firm’s renewables division witnessed a drop in revenue year-on-year.
July 27, 2021
Canadian Solar has closed a BRL500 million (US$100 million) financing facility to develop a Brazilian solar portfolio claimed to be the country’s largest, while also giving it the option to hold built solar assets for longer.
July 27, 2021
Community Choice Aggregators (CCA) Central Coast Community Energy (CCCE) and Silicon Valley Clean Energy (SVCE) have signed contracts for 778MW of renewable energy generation and 118.75MW of energy storage in California.
July 27, 2021
More than 140 business leaders have urged the US Congress to pass President Joe Biden’s bipartisan infrastructure bill, telling lawmakers that the bill is “desperately needed” to renew the nation’s infrastructure
July 27, 2021
A round-up of the latest news from the US solar market, featuring Vision Solar’s commitment to hire “hundreds” of sales staff as part of a two-state expansion, Recurrent Energy’s sale of two major assets in Texas and news of 8minute Solar Energy strengthening its legal team.
July 27, 2021
Tesla reported retrofit solar installations of 85MW in Q2 2021, cementing its recovery from a worst-ever performance in the corresponding period last year.

Subscribe to Newsletter

Upcoming Events

Upcoming Webinars
August 19, 2021
At 9am (PT) | 6pm (CEST)
Solar Media Events
August 25, 2021
Solar Media Events
October 6, 2021