PV module, cell, and wafer manufacturing capacity will slow significantly at the end of 2011 and into 2012, according to IMS Research. Manufacturing capacity will increase, only at a slower rate and more from start-ups entering the market than from existing suppliers expanding.
November 3, 2011 — PV module, cell, and wafer manufacturing capacity will slow significantly for the remainder of 2011 and H1 of 2012, according to IMS Research. Manufacturing capacity will increase, only at a slower rate and more from start-ups entering the market than from existing suppliers expanding.
Production capacity has been vigorously added for the last two years; almost 30GW since the start of 2010. This growth is finally slowing in response to sluggish demand in many key regions (Italy, Germany, the UK), and a severe PV module oversupply, IMS Research reports.
|Figure. Global PV module capacity and installations. SOURCE: IMS Research, November 2011.|
Over 50GW of PV module manufacturing capacity will be in place and operating by the end of 2011: over 54% more than at the start of the year. Annual global demand has only grown by 19% to 23 GW. In 2012, capacity will expand by less than 10%, just 6% in H1.
The source of expansions will change as well. Existing suppliers are cutting back and delaying expansions. Some are stopping production entirely, such as some smaller tier-3 Chinese companies. Much of the new capacity over the next year will be added by start-ups executing their market entry plans.
Conergy, Photowatt, and REC Group in Europe has announced production cutbacks, Sam Wilkinson, report author and senior research analyst at IMS Research, notes. Other suppliers are likely also making cutbacks that they are not obliged to publicly reveal.
The price plunge we’ve seen in cells and wafers is leading many companies to simply buy them rather than make them internally, said Wilkinson. This is “in contrast to the rush towards vertical integration that we?ve observed for last few years.” Suppliers are also accepting significant charges to cancel long-term supply contracts, gaining flexibility on the spot-market.
Detailed analysis of supply and demand dynamics in this market is available from IMS Research?s quarterly PV cell and module report: http://www.pvmarketresearch.com/report/PV_Cells_Modules_Supply_Demand_Quarterly_Q311