There has been a rapid increase in bringing new PV manufacturing facilities online globally due to a number of factors. New factories bring down PV prices while simplifying the fabrication processes enables efficient manufacturing of more cost-effective, lightweight and high-efficiency PV modules. And according to General Electric researchers, for each percentage point increase in efficiency, an approximate 10 percent decrease in PV cost can be achieved.
Industry estimates have put PV installations at 21GW in 2011 while the ongoing nuclear crisis in Fukushima has sparked a global call for solar energy. Japan's government aims to have PV panels on 10 million Japanese homes by 2020 and the country’s "Sunrise Project" intends to cut PV panel cots by a third from current levels by 2020, and then cut the 2020 prices in half by 2030. Germany's government has initiated a nuclear phase-out by 2022 and Germany’s Federal Environment Agency believes a 100 percent renewable energy by 2050 is technically feasible. Overall, the European Union has set a target of generating 15 percent of its energy from renewable sources by 2020.
Renewable-energy sources are expected to contribute up to 80 percent of the global energy supply by 2050, according to a May 2011 report from theUnited Nation’sIntergovernmental Panel on Climate Change(IPCC), a shift that will require a global investment of as much as $12.3 trillion by 2030.
Shifting Global PV Markets
Europe has been the largest PV market, followed by Japan and the US. But European cuts in feed–in tariffs are causing solar cell prices to fall while climbing silicon costs are hurting PV price margins. The feed-in-tariff (FIT) is what consumers pay extra for the use of solar energy. If FIT is too high it falls on consumers, while a low FIT would not attract investors.
The UK Solar Trade Association says feed-in tariff for PV projects in that country is killing the UK PV industry at a time when China, Japan and Germany are promoting solar. Renewable energy could generate more than 197,000 gigawatt-hours of electricity in 2020 and 424,000 gigawatt-hours in 2030, compared with 50,000 gigawatt-hours last year, according to a UK Department of Energy and Climate Change study released June 10, 2011. But if current constraints remain in place, the maximum possible renewable electricity generation would be only 105,000 gigawatt-hours in 2020 and 220,000 in 2030, the report concluded. The UK government is set to use these findings to shape energy policy through 2017, the agency said.
While European installations are expected to fall through 2012 due to solar incentive cuts, Germany is in a position to take the solar lead, according to Germany Trade & Invest in Berlin, the foreign trade and inward investment promotion agency.
Still, PV makers being hurt by falling profit margins fear an excess in manufacturing capacity from large Chinese companies that operate at lower costs, according to Moody’s Investors Service. Chinais the world's largest PV supplier, producing 50 percent of global output,followed by Japan and Taiwan.China already exports about 95 percent of its solar modules, mostly to Germany, and is looking at other emerging markets including recent deals to supply 40 African countries.
But the glut of Chinese PVs may soon subside since China’starget for installing PV power in their own country is doubling. The price of generating solar power in China is expected to drop 20 percent in the next five years as the country initiates large-scale installations after 2015, according to China’s National Energy Administration which says the country plans to install 10 GW of solar as part of its 12th Five-Year Plan for 2011-2015.
Thin-film Manufacturing Trends
Currently, flat-plate cells made from silicon that can convert sunlight to electricity only up to 20 percent efficiency and still dominate more than three-fourths of PV shipments, according to the U.S. Department of Energy. But the trend is toward manufacturing thin-film PVs. With conventional crystalline silicon (c-Si), a heavy glass front design requires care in handling and adds to installation costs. But thin-film cadmium telluride PV cells are less expensive to produce and manufacturers can deliver lightweight products that cut installation costs.
Meanwhile, the next-generation of thin-film PVs made from copper indium gallium selenide(CIGS) have already reached 15.7 percent efficiency in DOE’s National Renewable Energy Laboratory. While California-based startup firms Miasole, Nanosolar and Solyndra are all ramping up their CIGS production this year, thin-film companies like U.S.-based G.E. and First Solar are still investing in cadmium telluride rather than CIGS despite the gains in efficiency.
U.S. PV Factories to Watch
In 2009, G.E. sold its crystalline silicon solar panel assembly plant in Delaware. Now G.E. plans to build what it calls the largest thin-film solar factory in the United States, banking on cadmium telluride technology. The $600 million manufacturing plant will produce 400 MW of thin-film PVs and is planned to start running by 2013, though no location has been announced.
G.E. is using a thin-film technology developed by Colorado-based PrimeStar Solar. PrimeStar’s PVs have a 12.9 percent conversion efficiency verified by the National Renewable Energy Lab and G.E. says it has more than 100 MW of commercial deals pending, including 60 MW of thin-film panels for NextEra Energy and a 20-MW deal with Invenergy.
First Solar, G.E.'s leading thin-film competitor, pioneered cadmium telluride thin-film technology and currently produces cells with a 11.2 percent efficiency. First Solar, which has $12.73 billion in market capitalization and several factories producing a total of 1.4 GW of thin-film PVs, plans to expand their manufacturing to 2.7 GW by 2012. In early June, the company announced its second factory in Frankfurt, Germany, was producing PV modules ahead of schedule and is expected to be at full production by the third quarter of 2011. First Solar also has manufacturing sites in Perrysburg, Ohio and Kulim, Malaysia, as well as new plants under construction in Arizona and Vietnam.
Thin-film maker Abound Solar secured a $400-million loan guarantee from the U.S. Department of Energy and $110 million in equity financing last year to build a new factory and expand their existing 65 MW plant. The new facilities will give Abound 840 MW in thin-film capacity by the end of 2014.
Advanced Solar Photonics, the third largest U.S. crystalline silicon PV panel producer, is expanding its production capacity to 100 megawatts. ASP purchased a PV facility formerly operated by BP Solar in Maryland in late 2010 and has calibrated the factory’s production lines to produce 75 MW. The company plans to expand its production capacity to 250 MW with in the next three years to meet a strong demand for its BlackStar series modules and supply PV panels for large-scale projects currently being built by its parent company, BlueChip Energy Group.
New Canadian Facilities
The official opening of Siliken Canada Corporation's module manufacturing facility in Windsor, Ontario took place on May 18, 2011, where the company will manufacture an additional 50 megawatts annually. That facility adds to the existing Siliken facilities in Spain, Italy, France, Germany, Czech Republic, Greece, Belgium, the Netherlands and the U.S. The Windsor facility is Siliken's second North American manufacturing site, the other established in San Diego in 2008.
Ontario-based Canadian Solar Inc., which has operations in North America, Europe and Asia, announced June 1st it had teamed-up with China’s GCL-Poly Energy Holdings Inc. to build a 600 MW PV production plant in Suzhou, in the Jiangsu province. The new manufacturing plant, which can be easily expanded to 1.2 gigawatts, is 8 km from Canadian Solar’s current China PV facility and should be fully operational by mid-2012. From all its facilities globally, Canadian Solar plans to have an annual production of 2GW by early 2012.
Chinese PV maker Hanwha SolarOne also announced this month that Photowatt Ontario will manufacture 160 MW of modules in four years at its factory in Ontario using PV cells supplied by Hanwha. Hanwha SolarOne will then distribute the modules in the Ontario market starting in October 2011.
European Trends
During the past five years, MAG has supplied over 30 automated manufacturing production lines for PV panels throughout the world. Now MAG has received an order for a 30-MW production line from Solar-Energy sp. z o.o. which will be manufactured at MAG's Schaffhausen, Switzerland facility for Solar-Energy’s Bozepole Wielkie, Poland facility. Once up and running later this summer, Solar Energy plans to market the PV panels in Eastern and Western Europe. MAG says it also plans expanding its PV manufacturing operations into the U.S. with a capacity of up to 130 MW.
Isofoton,and South Korean company HKSilicon, announced in June plans to build one of the world’s largest factories to produce polysilicon for PV panels in southern Spain. The Silicio Energía project is to be located in Los Barrios, Cádiz and will have a capacity of 10,000 tons of polysilicon. The Regional Government of Andalusia is working closely with the Silicio Energía project as an anchor to attract similar PV-related industries and investment to the region.
And Antaris Solar, with headquarters in Germany and subsidiaries in Switzerland, the Czech Republic, Italy, France and the UK., announced in June the opening of a U.S. branch headquartered in Mechanicsburg, Pennsylvania.
The Future PV Market: USA
Fitch Ratings said this month it has a positive outlook for the solar sector despite the current oversupply and planned factory capacity expansions. Fitch says this is based on the global trend towards an increased reliance on renewable energy and that PV conversion efficiencies will continue to improve.
With China’s continued domination of the PV manufacturing and sales to European countries, other firms have the wide open U.S. market in their cross-hairs.
During a press teleconference May 25, 2011, the President of the U.S.-based Solar Energy Industries Association noted that the U.S. installation market will double from 1 GW in 2010 to 2 GW in 2011 and possibly double again if the current national tax credit is extended. SEIA went so far as to predict that the U.S. will be the world's largest solar market within a few years because of legal mandates.
Currently 31 individual states have set "renewable portfolio standards" (RPS) which mandate a certain percentage of that state’s utility power come from a renewable energy source by a specific deadline, opening the market for large-scale solar PV projects. These patchwork standards range from 2 percent in Iowa to 40 percent in Maine, with deadlines varying in the next 5 to 10 years. For example, California Governor Jerry Brown signed into law a new RPS on April 12, 2011, that requires the state’s utilities to generate 33 percent of their electricity from renewable sources by 2020. Arizonarequires 15 percent by 2025, New York State requires24 percent by 2013 and Colorado requires 10 percent by 2015 and then 20 percent by 2025. A move to replace this patchwork of state-based standards with a national RPS of 20 percent by 2030 has been proposed by both the U.S. Department of Energy and several renewable energy trade associations.
Meanwhile, the U.S., as well as Japan and Germany, is pursuing “Smart Grid” technologies and designing concepts around “Smart Cities” as electric vehicles play a larger role in the need for energy production and distribution. For these cities, the increase use of PVs will factor heavily in creation of a “Smart Grid” infrastructure.
