Solar PV in 2013: More diversification than consolidation

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Benchmarking companies in the solar PV industry used to be straightforward. Some companies made key materials (polysilicon, wafers, cells, modules or thin-film panels); others bought and sold these locally or through the value chain. Then project developers and installers added inverters and mounting and built the PV systems. Customers typically released cash up-front, owned the systems outright and could then sit back and enjoy a revenue stream linked to a government incentive.

It may sound a bit like a history lesson, but this was the solar PV industry until just a few years ago: one of several phases in going from megawatt to gigawatt. Doing benchmarking then was simple.

But the shift from a few gigawatts annually to 35GW-plus in 2013, having module pricing in the US$0.60-0.70/watt and seeing installed system pricing fall to US$2-3/W, changed this legacy model overnight. Anyone sitting pretty before (whether manufacturing, reselling or installing) had to change.

From 2011 onwards, these changes happened. Very few active in the industry today have a strategic roadmap that bears any great resemblance to the ones pitched to investors a few years ago. Those that clung on to module pricing dipping below the dollar per watt as being a temporary blip were finished. Installers that were contingent on local policies being maintained indefinitely were required to change business models, or get out of PV. And furthermore, new business models came on to the scene.

Indeed, what came into the industry – and in particular during 2013 – was a range of strategies in how to compete in this new PV landscape. A landscape that had gone global and was no longer about market-share gains in Germany, and was comprised of players that were not going to fit into any of the neat categories seen in the past.

In addition, installed system pricing levels could now usher in alternative financing schemes, with various types of free solar, third-party ownership and crowd-funding to name just a few. Coupled to this have been rapid increases in commercial and domestic energy tariffs and a far more pragmatic take on investments, where risk-free returns above 5% can appear to be among the safest long-term bets on offer.

During 2013, a wide range of short-term and long-term strategies have been unleashed on the solar PV industry. In many cases, companies previously in direct competition at one stage in the PV value-chain are barely coming across one another; rather, existing in niche application or geographic based served addressable markets. (It is worth noting as the year-end top-10 charts are counted down.)

The rate at which certain markets have grown quickly (and barriers have been placed on other markets) has been one reason for this shift. Having domestic supply or brand in a rapidly growing market definitely provides a benefit, so long as business models can adapt. Being politically connected only adds to this.

Whether to manufacture or not is also more visible on the radar. Indeed, in this respect, the buzzword is flexibility and having the buying power to control supply through advantageous OEM deals. Choosing to land the problem of profitable midstream wafer or cell supply on a capacity-heavy lower tier manufacturer that lacks brand or global marketing prowess is simply sound business practice, nothing else.

The opportunity exists because many Asian producers wrongly assumed that having capacity and making product available represented a sustainable working model. Shipping crates to Europe and passing the point-of-sale responsibility to distributors only had a finite shelf time. Today, the market opportunity here is rapidly dwindling.

In a nutshell, there are now many different business models that are viable across different PV regions or application segments, where you can simply guarantee what the customer (be it a  homeowner, a project developer or a utility) needs to fit their budget and on their timelines.

Only a few Asian firms (with patient and well-capitalised parent-companies or majority shareholders) can bypass the need for dynamic and flexible supply and sales strategies in the PV industry over the next 12 months. Having a long-term five to 10 year strategy is a luxury not available to the masses.

Therefore, while at the macro level, talk of global grid parity and learning curves makes for good reading, the reality is an industry that has never been more fragmented in terms of supply and downstream business models, with many companies now seeking to play on both sides of the fence.

2014 is likely to see more of the same. Indeed, some are now looking at the PV industry with a blank sheet of paper, no liabilities, and free to create a new business model that is different from existing market leaders. Whether these can co-exist, offer better value to the customer, or are destined to fail before they start will only become clear over the next 12-18 months.

Whether the PV industry follows any trends seen in legacy industries (consumer electronics, telecoms, semiconductor, etc.) is also too early to call. But sitting back and waiting to see some orderly consolidation of me-too companies would appear to be rather naïve. The rollercoaster ride of the PV industry would appear to have more ups and downs ahead, before it emerges with a handful of global leaders with clearly defined business models that makes the simple task of benchmarking once more a valid exercise.

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.
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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.

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