The rise and rise of subcontracting in the solar manufacturing industry


The latest slew of announcements from various sectors of the solar manufacturing supply chain to establish partial or complete production outsourcing is no accident and a trend that will continue grow, according to iSuppli. The market research firm noted that the latest SunPower news of a contract manufacturing deal with major electronics manufacturing services firm Flextronics is only representative of the early stages of a boom, especially in module assembly outsourcing.

“iSuppli believes SunPower’s move is part of an emerging trend in the solar market that closely parallels the situation in the electronics market in the early 1990s,” said Greg Sheppard, chief research officer for iSuppli. “Faced with rapidly exploding demand, the need to produce products close to end markets and the requirement to obtain sufficient capital, electronic OEMs in the early 1990s turned to EMS companies like Flextronics for help. This led to a massive boom in electronics outsourcing and explosive growth in the EMS business. In the early 2010s, a new EMS boom is starting up, this time in the solar panel business.”

According to iSuppli, contract manufacturers will manufacture 1.1GW worth of solar panels in 2010, up 200% from 369MW in 2009. One major factor causing solar-panel makers to turn to EMS providers is the rapid expansion of the market and limited funds to expand internal capacity. iSuppli recently updated its global solar installations forecast to a significant new level of 13.6GW in 2010, an increase of 93.6% from 7.0GW in 2009.

“Panel production conducted close to the end-market can minimize logistics costs associated with shipping, breakage and inventory,” Sheppard observed. “In a market where every penny per megawatt counts, this can help tremendously.”

This article requires Premium SubscriptionBasic (FREE) Subscription

Unlock unlimited access for 12 whole months of distinctive global analysis

Photovoltaics International is now included.

  • Regular insight and analysis of the industry’s biggest developments
  • In-depth interviews with the industry’s leading figures
  • Unlimited digital access to the PV Tech Power journal catalogue
  • Unlimited digital access to the Photovoltaics International journal catalogue
  • Access to more than 1,000 technical papers
  • Discounts on Solar Media’s portfolio of events, in-person and virtual

Or continue reading this article for free

Read Next

July 18, 2024
Pertamina NRE has signed a memorandum of understanding with state-owned energy company Coal Power Generation Company Bangladesh Limited to build the PV project.
July 18, 2024
EDP Renewables North America (EDPR NA) has inaugurated the 200MW/40MW  Scarlet I solar-plus-storage project in Fresno County, California.
July 18, 2024
US-based off-grid solar product manufacturer d.light has secured US$176 million to support its PayGo consumer loan offering in three African countries.
July 18, 2024
The facility can process up to 100,000 tonnes of decommissioned solar modules per year that can reduce electronic waste sent to landfills.
July 18, 2024
Recent PV pricing volatility has prompted Platts, part of S&P Global Commodities, to launch a new module spot market tracker for the US, Asia and Europe.
July 18, 2024
“We believe this policy will unlock opportunities for renewables as it increases electricity supply avenues."

Subscribe to Newsletter

Upcoming Events

Upcoming Webinars
July 31, 2024
1:00 PM (BST) / 2:00PM (CEST)
Solar Media Events
September 24, 2024
Warsaw, Poland
Solar Media Events
September 24, 2024
Singapore, Asia
Solar Media Events
October 8, 2024
San Francisco Bay Area, USA