The solar PV sector had a tumultuous 2012 thanks to trade disputes and a crippling oversupply that kept prices coming down. So what should we look out for 2013?
1. PV Demand Growth
The industry has been characterised by strong growth rates of 25 per cent to over 100 per cent year-on-year for the past decade.
Now, the industry needs to plan for growth at more modest levels.
2. Globalisation of PV Demand
2012 was the year that emerging regions emerged for PV demand and this trend is only going to get stronger as western Europe stagnates.
3. China End-Market Demand in 2013
China is forecast to account for approximately 25 per cent of global demand in 2013, well up from the 16 per cent share it held last year. The signs for this are clear based on the country’s 33 per cent share in the fourth quarter of 2012.
Emerging demand is confined to a select group of countries across the three emerging regions.
4. Capacity Imbalance Reset
Nameplate capacity levels at the 60 GW level are often cited but the PV industry currently has an ‘effective’ capacity of 41-42 GW.
Therefore, demand needs to exceed 40 GW for a proper reset.
5. Competitive Shakeout
The top 10 module suppliers by MW for 2012 only comprised 50 per cent of the year shipments.
A similar pattern is seen for crystalline silicon cell production and we can expect another two years of shakeout on the supply side.
6. Cost and Price Rationalisation
Every segment of the supply side is subject to price/cost pressure. Even reducing silicon / nonsilicon costs of modules to 53 cent/watt level by the end of 2013 may still result in negative gross margins.
7. Supply and Demand Rationalisation
Poly suppliers have been operating at reduced utilisation since the second half of 2012.
8. Evolution of PV Technology Roadmaps
Expect strong market share gains from standard crystalline silicon multi ingot/wafers with end-markets driving module efficiencies and power ratings.
Alternative growth methods have not gained traction, however, and are being phased out.
9. Capital Expenditure Cyclic Patterns
PV process equipment suppliers have been impacted severely by overcapacity thanks in part to over-investments in 2010 and 2011. There is a strong chance that 2014 will end up as low as 2013.
10. Domestic Protectionism Counter Measures
Trade wars, a direct effect of global overinvestment into domestic manufacturing, may yet have a profound effect on the PV industry into 2014.
Chinese and European decisions will be the key ones to watch.