2009 global pv cell and module report

2009 global pv Cell and Module
produCtion analysis
SHYAM MeHtA | GtM ReSeARcH

GtM ReSeARcH Note

GTM RESEARCH MAY 2010


2009 PV PRoductioN:
anotHer buMper year For ManuFaCturing
Masks supplier turMoil
This note discusses the results of GTM Research’s annual data collection process for
global photovoltaic (PV) cell and module production in 2009. Overall, 2009 was the
most challenging year for PV suppliers in recent memory, with severe initial oversupply
(exacerbated by the evaporation of Spain as a market of any consequence and the
loss of project financing) and drastic price drops. This consequently led to large losses,
major layoffs, and the first wave of consolidation across the entire value chain. At the
same time, 2009 was another record-breaking year for the global PV industry, with over
7 GW of modules installed, total module production of 8.95 GW, and cell production
of 10.66 GW – a 51% increase over 2008 cell production of 7.05 GW (itself an 88%
increase over 2007). As has been well-documented, the bulk of these modules ended
up being deployed in Germany in the third and fourth quarters of 2009, with existing
year-end digressions, the threat of more severe cuts, and module price declines (from
$4.00 per watt in mid-2008 to $2.00 per watt by the end of 2009) all doing their part
to drive an unprecedented installation volume of 1.3 GW in the last quarter of the year.
Whereas in January, top manufacturers were reportedly running at utilizations of below
25%, October through December witnessed them being capacity-constrained. To call it
a volatile year would be an understatement of sorts.

CoPYRiGHT 2010, GREEnTECH MEdiA inC All RiGHTS RESERvEd 2009 CEll And ModulE PRoduCTion 2


1 teCHnology trends: tHin FilM gains sHare oFF tHe
baCk oF First solar
Crystalline silicon (c-Si) PV cell production in 2009 was 8.02 GW, a 42% increase over
2008: as discussed below, the majority of these cells were manufactured in the low-
cost locations of China and Taiwan. Total c-Si module production in 2009 was 6.3
GW. Overall, crystalline silicon still dominates the PV technology landscape, with a cell
production share of 81% and a module production share of 78%: for cells, this breaks
into a 75% share for “plain vanilla” mono- and multicrystalline cells, and a 6% share for
high-efficiency “super” monocrystalline cells made by SunPower and Sanyo.

2009 was historic in that for the first time ever, a thin-film producer (cadmium telluride-based
First Solar) claimed the title of the largest cell/module manufacturer. In a year where most
producers considered themselves fortunate to expand marginally, First Solar doubled its
production, from 504 MW in 2008 to a staggering 1,011 MW: alone, the company made
up 10% of global supply. Thanks largely to the First Solar factor, thin film’s market share
increased yet again from 14% to 19% in cells, and from 15% to 22% in modules. This top-line
result masks the turmoil faced by almost every other thin-film producer in the space, as an
abundance of cheap c-Si modules and lenders’ unwillingness to finance nascent companies
and technologies combined to make life very difficult indeed: the top six thin-film producers
made up almost 70% of production, while the rest were left with only scraps to feed on. As
with the rest of the industry, however, Germany’s late surge benefited even these firms greatly:
non-First Solar thin film production therefore also increased significantly, from 462 MW in
2008 to 970 MW. Overall, 2009 thin-film production stood at 1.98 GW, representing another
doubling over the previous year’s production of 966 MW. Amorphous silicon constituted 40%
of this, or 796 MW, with Sharp and United Solar the top producers in this segment. 2009
was also the first year to witness more than 100 MW of CIGS production (166 MW, to be
exact), compared to only 74 MW in 2008: progress in CIGS is definitely occurring, albeit at a
measured pace, thanks to the efforts of such producers as Solar Frontier (formerly known as
Showa Shell Sekiyu), Wurth Solar, and the ever-controversial Solyndra.



FiGuRe 1-1: 2009 GlobAl PV cell PRoductioN bY tecHNoloGY (MW-dc)

Source: GTM Research

FiGuRe 1-2: 2009 Module PRoductioN bY tecHNoloGY (MW-dc)




2 regional trends: low-Cost loCations doMinate
Breaking down 2009 production by region confirms what the industry has known for
quite some time now: manufacturing cells and modules is now a game of low-cost
production. This is especially true for standard crystalline silicon cells, which have
become highly commoditized with little perceived differentiation across suppliers.
Almost half (49%) of the cells made in 2009 came from China and Taiwan; when limited
to crystalline silicon cells, this number jumps to 56%. With regard to modules, these
numbers are slightly lower (40% share for all technologies and 47% for c-Si alone).

The continued growth in Chinese and Taiwanese manufacturing has come at the
expense of both European and Japanese producers. European cell production actually
experienced a slight (1%) decline compared to 2008, and its production share, after
remaining steadily in the mid-20% range through the last half-decade, dipped a full 10%,
from 28% to 18%. This illustrates the fundamental disparity between cost structures: even
the most established European producers incurred heavy losses in 2009 and were simply
unable to compete profitably against aggressive pricing strategies adopted by Chinese
firms, which correctly assessed the existing environment as an opportunity to steal share.
Japanese producers expanded by 19%, aided no doubt by a resurgence in the Japanese
market, which more than doubled in 2009 to reach 484 MW of demand. Still, overall share
declined to just 14% for cells and a mere 10% for modules. This is a far cry from just five
years ago, when Japanese firms made up over 50% of the market.

U.S. share of global cell and module production remained relatively flat, at 6% and 9%
respectively. As was the case in 2008, the bulk of this came from three producers: First
Solar (CdTe) in Ohio, United Solar (a-Si) in Michigan, and Evergreen Solar (string ribbon)
in Massachusetts. Thin film still comprised the majority (56%) of U.S. cell production,
but lower compared to 2008 (68%). With more than 30 new manufacturing facilities set
to come online in the U.S. in the next three years (most of them module plants), it will be
interesting to see whether the U.S. becomes a more important player on a global scale,
even if it ends up serving its own demand, which is the situation in anticipation of which
most of these plants have been built. With a number of smaller c-Si module assembly
lines, as well as VC-backed thin film firms ramping up production in coming years, the
future technology mix in the U.S. is also an open question.



FiGuRe 2-1: 2009 GlobAl PV cell PRoductioN bY ReGioN (MW-dc)


FiGuRe 2-2: 2009 GlobAl PV Module PRoductioN bY ReGioN (MW-dc)




3 top produCers: First solar First, not Many surprises
With regard to cells, First Solar claimed pole position for cell manufacturing in 2009,
with 1,011 MW of modules produced, mostly out of its giant facility in Malaysia (another
low-cost location on account of the country’s generous tax holidays). The top four
positions represent a permutation of sorts: Q-Cells, number one in 2008, fell to the #4
slot, while Sharp, Suntech Power, and First Solar each moved up one place. Numbers
5, 6, and 7 are occupied by Yingli, JA Solar, and Kyocera, respectively; again, the same
three firms filled those slots in 2008, albeit in a different order. All in all, therefore, the
top 15 list looks much the same as in 2008, with the net effect being Chinese firms
moving up and European/Japanese firms (with the exception of Sharp) moving down a
few notches. The biggest jumps were made by Taiwanese E-Ton Solar (#24 to #15) and
Chinese Ningbo Solar (#30 to #14). Taken together, the top 15 firms comprised 65% of
global production, almost the same as in 2008. As the industry matures and successful
producers expand their capacity at a disproportionate rate, one would expect
continuing consolidation over the long term. And if any further proof were needed for
Chinese and Taiwanese dominance, a look at the names on this list will suffice: eight of
the top 15 firms are based in that region.

The list of top module producers in 2009 heavily overlaps those for cells, as the largest
PV manufacturers produce both components. With Q-Cells, JA Solar and Motech
(previously all pure-play cell producers) now entering the module production fray, this will
continue to be the case in coming years.

FiGuRe 3-1: toP 15 GlobAl cell PRoduceRS, 2009 (MW-dc)




FiGuRe 3-2: toP 15 GlobAl Module PRoduceRS, 2009 (MW-dc)




4 looking aHead: expeCt anotHer reCord breaking
year, but More oversupply
Our global supply-demand reconciliation reveals 2010 demand expanding significantly
(by 59%) to 11.2 GW, largely due to a bumper first half in Germany and strong gains
in Italy and the U.S. later in the year. Clearly, then, this seems to portend well for
manufacturers, and bodes another record-breaking year for cell and module production.
However, with the onset of feed-in tariff cuts in Germany in the middle of the year, we
can expect a return to an oversupplied market through the back half of 2010 and 2011,
although not nearly as severe as the situation that was witnessed in late 2008/early
2009. Our analysis indicates that 2010 will see another 6.9 GW of cell and 6.7 GW of
module capacity being added – most of it in China, Taiwan, and Japan – bringing total
global cell and module capacity to 25.1 GW and 22.7 GW, respectively. Much like 2009,
therefore, one can expect heated competition between suppliers, further price drops
(c-Si modules could be as cheap as $1.50 per watt by the end of the year), continuing
cost pressure on less competitive producers, and a fresh wave of consolidation. It
would not be at all surprising to see more producers closing up shop in Europe in
favor of establishing Asian facilities (as Q-Cells and REC will be doing) or resorting to
contract manufacturers (e.g., SunPower, Evergreen, and BP Solar) – all of which serves
to reinforce the fact, unpleasant as it may be to many, that PV cells and modules are
increasingly being viewed as fungible goods in this new solar reality.

FiGuRe 4-1: GlobAl PV SuPPlY-deMANd iMbAlANce, 2007-2013e




reCent gtM researCH reports
2010 Global PV Demand Analysis and Forecast

This report represents our latest annual comprehensive analysis of global
PV demand. It examines the characteristics that led the global PV market
to grow in 2009 despite the global financial crisis, and applies these
lessons in order to forecast demand and market conditions through 2013.

http://www.gtmresearch.com/report/2010-global-pv-demand-
analysis-and-forecast

Thin Film 2010: Market Outlook to 2015

This report assesses thin film’s impact on the global PV market by
analyzing all relevant factors that influence demand for thin film,
including technology and operational characteristics, module and
BOS costs, capacity and production estimates, and in-depth profiles
of over 60 of the top thin-film companies in the world.

http://www.gtmresearch.com/report/the-united-states-pv-market-
project-economics-policy-demand-and-strategy

The United States PV Market: Project Economics, Policy,
Demand, and Strategy Through 2013

This report will provide a comprehensive overview of PV demand,
project development, and financing in the United States, including
analysis and comparison of PV projects in the 16 largest state
markets. (376 pages)

http://www.gtmresearch.com/report/the-united-states-pv-market-
project-economics-policy-demand-and-strategy

CPV: New Applications and Emerging Markets

This report, building on research conducted in 2008 by the Prometheus
Institute and GTM Research, takes a freshly detailed look at the specific
technologies, applications, policies, early adopters and economics of
low-, medium-, and high-concentration CPV. (127 Pages)

http://www.gtmresearch.com/report/cpv-technology-and-market-
analysis-2009

A full array of GTM Research’s research reports is available at
http://www.gtmresearch.com/.



upCoMing gtM researCH reports
PV Technology, Production, and Cost, 2010 Forecast
This authoritative report contains a comprehensive analysis of the PV supply chain. It provides
detailed estimates and forecasts of PV cost structure, technical characteristics (efficiency,
degradation), volumes (capacity and production) for all major components (wafers, cells, and
modules) and all major technologies through 2013. Additionally, it details projected market
share and selling prices by technology through the bottom-up construction of global supply
and demand curves for PV, and profiles the leading 150 manufacturers in the PV space.

Utility-owned PV Business Models
Growth in the North American PV market is increasingly being driven by utility demand.
New project announcements for utility-owned generation and utility power purchase
agreements (PPAs) are arriving constantly, and utilities are becoming increasingly familiar
with PV technologies as their renewable energy requirements ramp up. But the utility
PV market remains in its infancy, and only a handful of projects were completed prior to
2010. This report will analyze the current state of the growing North American utility PV
market and forecast its development. The report will include a comprehensive analysis
of the utility PV project pipeline by location, developer, and technology, as well as
profiles of project developers, utilities, and utility programs.

Polysilicon: Supply, Demand, and Market Outlook Through 2013
This report will provide a comprehensive and data-rich analysis of the impact polysilicon
will have on the solar market over the next half-decade. It will contain a detailed analysis
of polysilicon cost structure, historical and projected capacity and production volumes,
as well as detailed profiles of the leading polysilicon producers in the market.

PV Inverter Market Outlook Through 2015
Rife with the potential for technological innovation and significant profits, the PV inverter
space has assumed increasing importance and investment over the past year. This
report provides an end-to-end analysis of the PV inverter market, with cost structure,
production volume, and market share analysis for the leading vendors in the space.



GTM Research, a Greentech Media company, provides critical and timely market analysis in the form of concise
and long-form market research reports, monthly newsletters and strategic consulting services. GTM Research’s
analysis also underpins our webinars and live events. Our analyst team combines diverse backgrounds in the
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sectors. Complementing decades of real world experience, the staff holds advanced degrees in finance,
engineering, public policy, law and environmental management. GTM Research is situated in the major global
markets for greentech innovation worldwide, with offices in San Francisco, Boston, New York and Germany.
www.gtmresearch.com

Tate Ishimuro Shyam Mehta
coNtAct

Research Sales Senior Solar Analyst
ishimuro@greentechmedia.com mehta@gtmresearch.com
+1 415 777 9917 +1 718 384 5190


2009 global pv cell and module report

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