Photovoltaics industry capital spending set for recovery, says IC Insights

Share on facebook
Share on twitter
Share on linkedin
Share on reddit
Share on email

A new report from market research firm, IC Insights highlights the expected recovery in capital spending within the photovoltaics industry as the market recovers over the next few years. The market research firm claims that spending on manufacturing plants, equipment and materials in both the crystalline (c-Si) and thin film sectors has not declined as much as PV manufacturers had wanted in light of the slump in demand and difficult financial conditions, restricting project finance for solar installations.

IC Insights said in the report that it was late in 2008 that major PV manufacturers started to make capital spending cuts as the scale of the decline in demand became clear. Although many significantly reduced spending budgets for 2009 compared to 2008, long-lead times and previously planned expansions already taking place meant that many manufacturers could not abruptly halt all expenditures.

Although 2008 was a record year for PV installations, production capacity was already growing faster than actual demand, which saw many market analysts warn last year that a mismatch between supply and demand was developing. IC Insights believes that the inability to reduce spending fast has further aggravated the mismatch. The market research firm now expects PV production capacity to increase by 32% in 2009, compared with 2008, reaching a nominal installed capacity of 11.5GW. Capacity reached 8.7GW in 2008, a 69% increase over 2007, according to IC Insights.

The key concern is that IC Insights is forecasting a 22% decline in solar system installations this year, creating the need for further capital spending cuts in 2010 to reduce the supply and demand imbalance.

Therefore, IC Insights is projecting the PV industry will cut capital spending further in 2010 to approximately US$680 million, down from US$1.13 billion in 2009, a decline of 40%. Cuts in capital spending will slow capacity expansion to just 15% in 2010, yet the solar market is expected to recover with a 37% growth in system installations.

The supply and demand mismatch will impact manufacturing utilization rates. The market research firm projects rates to plummet from 83% in 2008 to 54% in 2009 and to 52% in 2010.

As the recovery in demand moves through 2011, capital spending will slowly recover, IC Insights said. Spending is expected to nearly reach the levels set in 2008 in 2012 when spending should reach US$1.34 billion an increase of 74% compared to 2011. Further growth in spending is expected in 2013, when capital expenditure is set to reach US$1.97 billion, a 47% increase of 2012.

As market demand increases manufacturing capacity utilization is expected to increase to 63% in 2011 and return to 2008 levels of 82% in 2013. The high utilization rates will also contribute to overall cost per watt reduction strategies, IC Insights noted in the new report.

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.
6 September 2021
The 38th European Photovoltaic Solar Energy Conference and Exhibition will be held online from 6 - 10 September 2021, allowing PV experts from all around the globe to participate with just one click! The EU PVSEC is the world's leading forum for PV Research and Development and the biggest Conference on PV Solar Energy worldwide. That is why PV experts from all around the globe are keen on gathering together each year to be part of this specialist’s event, to present and discuss the latest developments in Photovoltaics, to network and to conduct business.

Read Next

July 29, 2021
Tracker and racking provider Arctech has delivered SkySmart II tracking system to a 575MW agriculture-sharing solar project located in Nangong City, Hebei Province, China.
July 29, 2021
Unigreen Energy, owned by Hevel majority shareholder Ream Management LLC, has broken ground on a wafer and cell manufacturing plant that will produce 1.3GW of silicon n-type monocrystalline ingots and wafers as well as 1GW of heterojunction technology (HJT) solar cells.
July 29, 2021
Meyer Burger has revealed plans to launch a solar roof tile product, expanding its rooftop solar product range.
July 29, 2021
US residential solar installer SunPower has partnered with EV charging provider Wallbox to add EV charging technologies to its portfolio.
July 29, 2021
US residential solar installer Sunnova said it was investing in its end-to-end solar services to cater for customers demanding more from their rooftop installations.
July 29, 2021
The US Senate has passed a new bipartisan infrastructure bill after weeks of protracted discussions, establishing US$550 billion in new infrastructure funding as part of an investment described as “once-in-a-generation”.

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
Solar Media Events
October 19, 2021