Solar PV module production is set to reach the 50GW milestone in 2014, according to the latest NPD Solarbuzz PV Equipment Quarterly report.
New analysis by the market research firm follows on from its recent major forecast update of global end demand reaching at least 45GW next year and potentially reach 55GW and highlights the significant recovery in the PV industry after two years of overcapacity.
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NPD Solarbuzz has previously noted that the “effective capacity” in the industry was around 45GW. The projection that module production could reach 50GW means that major manufacturers are expected to add capacity next year to meet strong demand or lose market share.
The market research firm said that manufacturers were already planning to increase module production by 25% in 2014 to 49.7GW modules, compared to the 39.7GW of modules being produced in 2013.
“PV manufacturers continue to prioritise cost-reduction across the entire c-Si value-chain, with improvements in efficiency coming mainly from higher-quality multi c-Si wafers,” said Finlay Colville, vice president at NPD Solarbuzz. ”While there will inevitably be short-term supply issues throughout the year, polysilicon and wafer supply is considered adequate for 45 to 50GW of c-Si module shipments in 2014. Chinese cell and module suppliers will continue to operate a flexible manufacturing strategy, with new capacity expected to come online during the second half of 2014.”
With controlled capital spending expected to target adding module assembly capacity, dedicated tier 1 solar cell manufacturers are expected to follow suit and add capacity proportionally to meet integrated module manufacturers' increased production.
Spending on capital equipment is therefore expected to recover in the first half of 2014, with capacity coming on stream in the second half of the year to meet the typically strong second-half period.
Although capital spending is expected to increase in 2014, selective purchases, especially in the module assembly sector, will be the norm. However, should demand continue to increase in 2015, there is the possibility that a broad-based capacity expansion phase will occur across the manufacturing supply chain.
Technology trends
According to NPD Solarbuzz, standard p-type multi c-Si modules will remain the leading solar PV technology, accounting for 35% of PV modules produced in 2014.
Leading Chinese c-Si suppliers are expected to continue to increase production of p-type multi c-Si products as this is seen as the fastest route to restoring operating margins to pre-2012 levels.
The tactic is complemented by a highly cautious approach to transitioning next-generation technologies from the research lab to mass production, according to the market research firm.
Many tier 1 manufacturers have already invested in the R&D and various cell technology upgrades for certain production lines to support higher module efficiencies and production levels.
However, the strongest technology share gains in 2014 are expected to come from the advanced p-type multi segment that includes double screen-printing, ion implanting, selective emitters, wrap-through variants and rear-surface passivation. This segment is expected to increase from 23.8% in 2013 to 27.2% in 2014.
Yet, NPD Solarbuzz believes that a dual strategy will continue to be the major barrier to any common technology roadmap being implemented within the PV industry over the next two to three years.
Is mono demand rising?
According to the NPD Solarbuzz report, the share of high-efficiency p-type mono and n-type modules is set to decline from 29.6% market share in 2013 to 29.3% in 2014, while production will grow by 2.8GW in 2014 due to the overall growth of the industry.
The increase in high-efficiency c-Si modules is being driven by space-constrained PV deployment, characterised by the booming Japanese end-market, and by the strategies of established leading tier 1 suppliers, such as SunPower and Panasonic, that continue to secure premium module pricing levels through downstream channels, Solarbuzz said.
Thin-film trends
Due to the expansion of c-Si production, thin-film production is expected to continue to lose market share, declining from 9.4% in 2013 to 8.9% in 2014.
Investments in new thin-film manufacturing equipment declined to an eight-year low during 2013, but are forecast to increase significantly in 2015, as existing suppliers and new entrants into the market add capacity.
According to the market research firm, the top two thin-film suppliers, First Solar and Solar Frontier, will produce almost 85% of all thin-film modules in 2014. Both companies are near full capacity in 2013, suggesting continued strong demand through 2015 could see a new phase of capacity expansions in the thin-film sector.
