The PV industry is quickly heading towards a deep reorganization, in a market showing signs of significant maturing and with repeated growth crises. This is the picture of the PV sector given in the first day of the fourth edition of the “ITALIAN PV SUMMIT, roadmap to grid parity” in Verona.
“The regulatory uncertainty can speed up or delay this process, but in both cases it damages the manufacturing sector, which needs wider time horizons in order to invest. Nevertheless, the long term fundamentals for the industry worldwide are still very positive, above all taking into account the fast cost cutting, the development of new markets and of other markets less and less dependent from incentives”. These are main points of the speech made by Guido Agostinelli, Managing Partner of Syntegra Solar, during the fourth edition of the Italian PV Summit in Verona, Italy, highlighting a PV industry scenario, which is rapidly changing.
The effects of this evolution will be marked in the short period – according to Agostinelli – by insolvency cases, by an increase of mergers and acquisitions of manufacturers, repositioning, reorganizations, changes of business model etc. aimed to rationalize the supply and get to a consolidation of the whole industry, which will become more sustainable and profitable.
The troubles of the PV industry derive from the turbulent entry into the market, in the last 10 years, of many companies, that resulted in a production capacity too high in comparison to the demand, which remained limited to a few markets with particularly attractive incentives, even if often with short range rules. Today the production capacity of PV cells is close to 55 GW (4.5 GW/month), twice the demand, which is about 27 GW. 40% of the supply of cells is provided by the 15 main manufacturers worldwide, and the competition level is among the highest ones in the whole PV chain, like in the modules production. In the top part of the chain (from the silicon ingot to the module) there are over 160 operators and the first 40 cover 80% of the market.
Besides, there has been a price cut of more than 70% of the PV technology in only three years, which on one side resulted in a relevant increase of installations, but on the other side in a stagnation, if we consider the market in terms of turnover. The unbalance between the global demand concentrated in the European Union (65%) and 45% of the module production located in China has increased. While the demand from the European market will decrease to 40 – 50% by 2015.
To react to this cycle the PV companies will have to play on all fronts: improving and optimizing the production, increasing the products performance, looking for new segments of the market.
Andrew Beebe, Chief Commercial Officer of Suntech, said that “a stable regulatory framework and international cooperation are key for the further development of the Italian solar sector. Free trade and competition are a prerequisite for innovation and job creation in the global solar industry. We welcome that Italy and China are strengthening their economic cooperation and that both countries are supporting the growth of the dynamic global solar sector”.
In the meantime the world market, with an accumulated power of almost 70 GW (created in only 11-12 years), of which 51.7 GW in the European Union, is ready to break, between the end of this year and the beginning of the next one, the record of 100 GW installed, as remarked by Reinhold Buttgereit, Secretary General of EPIA (European Photovoltaic Industry Association). But perhaps the most significant sign of the radical change of the European energy system can be seen in the evolution of the new installed power for the different technologies for electricity production: there are about 22,000 new PV megawatt installed in the EU during 2011, in comparison to almost 9.000 MW with gas, net of emissions, and less than 2,000 MW with carbon. In the nuclear sector in 2011 there were only closures (- 6.200 MW).