How solar PV industry became a global phenomenon

The recent slew of quarterly reports from the world’s major solar PV manufacturers have delivered some encouraging news: surplus capacity is being removed, manufacturing costs continue to fall, selling prices have stabilised and margins are improving. Some solar manufacturers may even post a profit later this year or in 2014.

But by far the most impressive piece of information was the extent to which the industry is growing in new markets. The influence of Europe, which kicked off the solar PV boom nearly a decade ago with its feed-in tariffs, is fading. China, Japan and the US will compete for domination in the coming years, but strong markets in the rest of Asia, Africa and South America are also emerging.

“The global PV market is becoming more diversified,” says Liangshing Miao, the chairman and CEO of Yingli Solar, the world’s biggest manufacturer of solar PV. “China, the US, Japan and other new and emerging markets, will become the main drivers of demand in the second half of this year. (We are witnessing) the globalization of the PV industry.”

This is a recurring theme in the industry. Last month, Deutsche Bank published an analysis which talked of a major “inflection point” in the global PV industry. Analyst Vishal Shah said that three-quarters of the world’s market will be “sustainable” for solar within 18 months, meaning there is an economic case to install solar PV with little or no subsidy.

More recently, Deutsche Bank noted that the US – the world’s biggest electricity market – was rapidly approaching the point where more than half of its states were at “grid parity”, also meaning that no additional subsidies are required for solar PV. It predicted the US market would reach annual installations of 16GW by 2016, and have total installed capacity of 50GW.

But it’s not jut the big four markets that are offering huge opportunities for solar PV. In another report, Deutsche said Chile could become the first subsidy-free market in the world, explaining why it had more than 3,500MW of projects in the pipeline.

Robert Petrina, Yingli’s head in the Americas, says sales in Latin America have surged 1,700 per cent over the last year, utility-scale projects are popping up everywhere and distributed generation is very strong.

He cited Chile, Mexico, Ecuador and Brazil (Yingli is a sponsor of the FIFA World Cup in 2014) as being among the strongest markets in Latin America. It now operates in 18 countries there. “The signals overwhelmingly point to continued development in accelerated PV adoption,” Petrina says. “We are seeing new markets open up and project sizes increasing in those regions.”

Yingli published this graph in relation to its 2nd quarter results to illustrate how demand is moving away from Europe. The most interesting parts are the first and third columns, because they highlight how Europe has shrunk from more than 50 per cent of demand to just over one quarter.

Yingli’s Miao says the company is already redeploying staff and resources to other emerging markets in Africa and Asia.

In South Africa, the government has already signed contracts for 1GW of solar PV and is currently holding an auction for another 400MW of PV capacity. The provincial government of Gauteng announced earlier this month it would spend $1 billion installing 300MW of solar on the rooftops of all state-owned buildings.

In Zimbabwe, solar developer Twalumba has reportedly signed an MoU with British company Thompson Cole to develop eight solar farms totaling 600MW over the next 15 months, with the help of Chinese and British financing. Saudi Arabia is gearing up to make a massive investment in solar PV, along with other Gulf and north African countries. On a smaller level, Ethiopia is half way through a World Bank-sponsored program to bring distributed solar to 25,000 households not connected to the grid. Private companies offer similar programs in Africa and Asia to some of the 1.6 billion people who don’t have electricity.

In Asia, India is working its way through its ambitious program to have 20GW of solar PV by 2022, Pakistan has just announced plans for 700MW of solar capacity in Punjab province, Bangladesh already has installed a million off-grid solar systems, and has announced plans for another 500MW deployment. Thailand and Malaysia are emerging as strong markets, and a new source of manufacturing. Even Brunei is looking at introducing a feed-in tariff for solar, albeit to help the oil-rich sultanate reach an incredibly modest renewables target of just 10 per cent by 2035.

The predictions of Deutsche Bank, other investment banks, and individual analysts such as Tony Seba, are based on the premise that fossil fuel prices will continue to rise, while solar PV costs will continue to fall. This last assumption is contested by many in the traditional utilities business, but these two graphs below tell us much about the changing dynamics of the industry, and puncture holes in the views of some that the price falls in solar PV modules are unsustainable.

The first graph on the left (from Yingli’s 2nd quarter accounts) shows that in just the past year, the non-silicon cost of PV modules has fallen by 18 per cent. And on the right, we see that because prices have stabilised, or even risen in some markets, the gross margins of the company have rebounded. The fall in costs are consistent with a recent study by the National Renewable Energy Laboratory and the Massachusetts Institute of Technology that suggests production scale, rather than low labour costs, has driven China’s boom in manufacturing PV modules, and delivered its cost superiority of other manufacturers.

Intriguingly, Yingli chief strategy officer Yiyu Wang said that project costs for its current pipeline of 130MW in utility-scale solar projects in China are about $1.03-$1.05 a watt. That is less than half the cost of smaller projects in Australia, such as those to be built under the ACT Big Solar program, and one-third of the cost of AGL Energy’s 155MW solar plant proposed for Broken Hill and Nyngan in NSW. Wang suggested that Yingli would generate a return in the “higher mid teens” for these projects.

11 Comments on "How solar PV industry became a global phenomenon"

BillT on Wed, 11th Sep 2013 3:43 am 



And just of what QUALITY is that $1.03/watt panel? Will it last 20-25 years as they are supposed to do or fail in the first 5 years?

I would rather pay more for quality than less for speed. As a ‘guarantee’ is about worthless today (who knows if the company will last as long as the guarantee? Or the store that sold it? How do you return something from halfway around the world when there is no shipping at a reasonable price?)

By local is your best bet. If you cannot, buy the best quality you can find at whatever the price. Or have your system fail when you need it most.

I will add that no ‘renewable’ will last longer than it takes to wear out after oil is no longer available to make new ones. So solar, etc, systems may get you to 2050, if you are lucky. After that no ‘alternatives’ will be working. How many years do YOU have left? I would be 106 in 2050, if I make it that far. See yah there! ^_^

GregT on Wed, 11th Sep 2013 5:39 am 



I just spent a week on an island off of the coast of BC. Lasqueti Island. No electricity, and very little water. It was a very enlightening experience.

The island has been touted as ‘off the grid’, and many people looking for that lifestyle have driven property prices up astronomically. Solar PV and wind generators everywhere, as well as the constant din of deisel gas powered generators.

Both times I travelled the foot passenger only ferry service, people had battery cells and solar panels in tow. They had apparently reached the end of their useful lives,or we’re defective, and were in need of warranty work, or replacement.

The ‘cabin’ that I stayed at, had an impressive solar, wind, battery, and deisel power generation system in place. There appeared to be a bad cell in one of the batteries, that would require some troubleshooting, so we relied for the most part on deisel fuel to keep the lights on at night, and our food to be refrigerated.

All service and replacement of parts, required fossil fuels. The ferry service to and from the island, the transport from major distribution centers, not to mention the entire processes involved in the manufacturing of the parts to begin with.

I plan on installing solar, wind, and micro hydro in our transitional ‘home’, but I am also well aware of the reliance on fossil fuels in their ongoing ‘upkeep’. I also plan on stocking a lot of parts.

Jerry L on Wed, 11th Sep 2013 6:49 am 



Perhaps it is important to ask what is the carbon foot print, or the energy return on investment of chinese versus US or European produced solar panels. The last time I read some analysis the Chinese solar panels had about half the energy return on investment as the european panels. Does large production scale have any effect on EROI or the carbon foot print of PV production and instillation?

Chris on Wed, 11th Sep 2013 8:21 am 



Solar just makes complete sense – provided that the costs of deployment are right. To become subsidy free would mean that the industry will only continue to grow and grow.

Time and time again the Solar Sector has reduced costs, maintained quality and achieved success. With new developments coming through all the time from the leading manufacturers, what today is cutting edge technology soon becomes the backbone of “cost driven” solar projects.

The future must certainly be bright and here at All Eco Energy (www.allecoenergy.com) we see a long and happy future for the UK solar PV market.

BillT on Wed, 11th Sep 2013 3:07 pm 



Chris, you are aware that each solar panel takes the equivalent of 3-4 tons of coal or energy equivalent to get it from mines to roof top? And many of those steps require oil energy.

Every cubic yard of concrete takes a barrel of oil from quarry to placement. Also requiring oil at most stages.

Hoe long will solar or any ‘renewable’ last when the roads crumble and the bridges may be 100 miles apart? When the mining machines no longer are available? When the materials from all over the world that are necessary stop flowing?

No, solar may extend energy for a few years, but it will be gone soon after oil is gone. So, dream on but you better be prepared to find other work before 2050, or retire. Maybe much sooner if a world war breaks out.

bobinget on Wed, 11th Sep 2013 3:47 pm 



I’ve had the luxury of an 8 KW PV grid tie system for six years, with only slight diminishment of power.

As a energy investor I watched First Solar (FSLR) go from over $300 in 2008 to $12. about a year ago.
Being such a happy solar camper already I bought
a few hundred shares of FSLR. A month or two later
I bought Canadian Solar (CSIQ). Since then I continue to add shares as funds permit. What any good investor loves are shorts who make their living borrowing shares at what they believe to be inordinately high prices then either waiting for those prices to decline or waging on line and TV propaganda wars that make AGW deniers look reasonable. Unlike AGW deniers,
‘shorts’ mischief, if they are mistaken, can and often is undone. This is the time to be adding to one’s position.

But that’s not what I’m posting about.

Several developments that should be of general interest are happening rat now.

New strategies for selling PV’s are in play.
The first; PV makers are building turn key power plants
plugging into grids and in effect have become utilities.

FSLR recently traded millions of shares to GE for its solar technology and manufacturing facilities. This trade will be accretive by 2014.

Speaking of GE, Just this morning we learn GE has developed a better battery. (Google GE mining for details)
This is huge news for EV’s and the solar industry.
As everyone here knows insufficient storage are brakes behind Electric vehicle sales. I’m NOT saying
GE’s latest battery improvement is the last word at all.
Simply that this storage barrier will, sooner or later be overcome. The real secret, lighter vehicles, aircraft, has already been demonstrated with materials like grapheme and
When we first heard of ripstop nylon, carbon fibers, Kevlar micro fibers, nanotechnologies, we thought THIS is the future. I have no idea what’s next but I hope you all live long lives to enjoy.

Nanotechnology (sometimes shortened to “nanotech”) is the manipulation of matter on an atomic and molecular scale.

Graphene is one of the crystalline forms of carbon, alongside diamond, graphite, carbon nanotubes and fullerenes. In this material, carbon atoms are arranged in a regular hexagonal pattern. Graphene can be described as a one-atom thick layer of the layered mineral graphite. High quality graphene is very strong, light, nearly transparent, an excellent conductor of heat and electricity. Its interaction with other materials and with light, and its inherently two-dimensional nature, produce unique properties.

http://www.dailyfinance.com/2013/09/11/breakthrough-energy-technology-successfully-powers/

Kenz300 on Wed, 11th Sep 2013 3:48 pm 



The price of oil, coal and nuclear keeps rising and causing environmental damage.

The price of wind and solar keeps dropping and it’s safe and clean.

No monthly fuels bills after installation of a wind or solar system.

bobinget on Wed, 11th Sep 2013 3:59 pm 



First Solar acquires GE thin film technology unit 07.08.2013
First Solar, PNM partner on planned 23 MW New Mexico plants 25.07.2013
First Solar makes $427.7 million from capital increase 20.06.2013
Analysis: First Solar raising cash at opportune time 18.06.2013
First Solar to develop a 50 MW solar plant in New Mexico 06.06.2013
First Solar records profitable Q1 results 07.05.2013
First Solar: Initial moves away from thin film? 11.04.2013
First Solar stock surges on major announcements 10.04.2013
US: AZ Sun Program announces another 34 MW PV facility 04.04.2013
First Solar tops 2012 EPC rankings 27.03.2013
First Solar tops PV project developer list 19.03.2013

Read more: http://www.pv-magazine.com/news/details/beitrag/first-solar-agrees-to-sell-139-mw-californian-power-plant_100011017/#ixzz2ebHYNSHU

bobinget on Wed, 11th Sep 2013 4:14 pm 



Most large PV makers adopted this new strategy of using ONLY solar power to produce new PV’s.

The glass, aluminum, even transport used in solar panel production is now being 100% solarized.

Any individual with capital can open a tiny solar powered factory. Farmers can pump, reclaim waste water for irrigation using ONLY solar. A plug-in Toyota
owner can commute almost for free.

One can easily understand why coal/gas burning utilities got the message. In survival mode are already making the shift to wind and solar where appropriate.

BillT on Thu, 12th Sep 2013 1:58 am 



Lots of PV propaganda on here, but it still will not last beyond oil. As the first comment states, after only 6 years, efficiency/electric is dropping. At 20 years its useless. At which time there will be no replacements. It’s is another high techie product that cannot exist without a huge, complicated production system and infrastructure to make it possible. Neither will exist in 2050, or sooner.

Harquebus on Thu, 12th Sep 2013 4:33 am 



I’ll say it again. The increasing cost of energy will put solar Pv and wind out of business. They do not return the energy used in their manufacture and construction.