The PV industry has had another explosive growth year in 2008. As is often the case, news in only the last few months of the year have painted the perception that things are turning for the worse as the credit crunch manifested in the U.S. turns into a global economic recession, impacting the growth in the PV sector along the way.
When reviewing the top news stories within the ‘Market Watch’ section, it was pleasing to see that there was a balanced mix between ‘good’ and ‘bad’ news that generated the most traffic.
With the economic crisis gaining momentum in September 2008, our coverage of a market research report from Lux Research in early October highlighted that the industry was on the verge of a period of module overcapacity leading to falling ASPs that would wipe out many smaller module manufacturers in 2009.
Since then, we have seen many PV manufacturers lower revenue and production guidance as well as announce shutdowns for extended periods over the holiday period (Q-Cells, for example). Worse still is the hazy news coming out of China that many small module manufacturers have closed shop and laid off workers as demand falls due to the lack of project finance that is an important aspect of the larger-scale PV installations.
However, Lux Research noted that the PV industry is still expected to grow 48% per annum through 2013, and reaching 23GW, compared to 4.9GW in 2008. Another positive, perhaps lost in the recent noise surrounding Q-Cells’ revised guidance, was the fact that it still expects revenues to grow by 40% plus in 2009, while almost doubling capacity to meet demand.
In November 2008, we covered news from market research firm iSuppli Corp., which noted that polysilicon prices were heading significantly south in 2009, to perhaps as low as US$100 per kilogram (spot price) as overcapacity looms large. In recent weeks, MEMC, for example, has lowered revenue projections, while polysilicon users rush to renegotiate contract prices, cancel orders and make revisions to delivery schedules, further impacting the polysilicon supply chain.
As polysilicon spot market prices topped US$500 per kilogram in 3Q08, the emergence of thin-film manufacturing this year is no coincidence. A report from the Prometheus Institute proved very popular as the thin-film market was projected to reach 40% of worldwide photovoltaic production by 2012.
A shock piece of news that caught many by surprise (including myself) was the expected establishment of a UK feed-in tariff for renewable energies. Early days yet for the UK but it does reflect developments finally taking shape in other EU countries such as Italy, France and Greece that will become significant new markets for PV through 2015 under variously structured incentives.