Deutsche Bank analyst Peter Kim shares more insights from last week’s Solar Power International: module makers see strong 1H11 demand (and good pricing), CIGS is stepping up, and bankability is even more clearly a key metric for PV projects.
October 20, 2010 – Deutsche Bank analyst Peter Kim shares more insights from last week’s Solar Power International: module makers see strong 1H11 demand (and good pricing), CIGS is stepping up, and bankability is even more clearly a key metric for PV projects.
Module demand, pricing power
Module suppliers that Kim talked to at SPI were “almost unanimous” in their confidence about 1H11 demand for solar modules, and also that module pricing will hold up well. The caveat, of course, is this doesn’t assume “low-probability factors” such as hard caps in big markets like Germany and Italy.
Costs from materials (polysilicon, wafers) to cells is trending higher, but should moderate by year’s end or early 2011. Higher costs could offset 3Q10’s price increases — and dent margins for companies who lack vertical integration, while boosting those who can take advantage of higher ASPs. Look for a stronger Euro “to be a meaningful contributor to pricing in the quarter,” Kim writes.
CIGS still rising
The emerging viability of CIGS took another step at SPI, with thin-film CIGS coming up “repeatedly” in discussions about module technologies and trends, and nods to recent news announcements from GE and Solar Frontier, TSMC’s CIGS investments, and Wal-Mart using CIGS modules. The upshot? “Commercial proliferation of CIGS thin film modules look to be closer to being realized,” Kim writes, though acknowledging the need for “an extended trail period” before being considered “meaningful rivals” to CdTe and amorphous silicon (a-Si).
Financing is more available today than a year ago but still far from 2007 levels, Kim points out, and so the concept of “bankability” has gained steam — i.e. convincing banks and insurers that a project is fund-worthy, often by providing extensive performance and reliability data. It’s not quite as visible a metric as module production costs or ASPs, but it’s a key metric now in any large-scale solar PV project, he notes. And it’s evolving to incorporate not just long-term viability but also to reflect a project’s (and its backers’) balance sheet strength and technology maturity. “We believe this could have significant implications to competitiveness, particularly in the event of over-supply state,” he writes.