Government incentives that encourage investment in renewable energies will continue to drive technological advances in the global semiconductor market, a new report by semiconductor expert GBI Research has found.
The new report* found that government incentives and Feed-In Tariffs (FITs) are providing vital, worldwide support for investors in the solar photovoltaic (PV) systems market, increasing the number of installations in many regions and creating development potential for semiconductors in solar PV systems.
Major markets in Europe, including Germany, Italy, the Czech Republic, France and the UK, have witnessed market growth for PV installations, resulting in an increased demand for semiconductors used in PV systems. FIT programs implemented to attract PV installation investors and develop renewable energy generation have also been successful in several US states, including Hawaii, California, Florida, New Jersey and Washington.
In Asia-Pacific, China’s 973 Scheme supports the development of future solar PV technologies, including thin-film and dye sensitized solar cells, while Japan’s $25.6m-project to improve its PV power generation technology through the application of new materials and solar cell structures has given the semiconductor market the boost it needed during times of financial uncertainty.
Companies are already benefiting from the incentives, with sales revenue of semiconductors in solar PV systems hitting $27.75 billion in 2011 and expected to further rise to $32.06 billion by the end of 2015. JA Solar has announced that it may establish a solar cell production base in the US to capture potential regional markets, while global company Suntech increased its overall production capacity and shipments of solar modules in 2010.
Increased semiconductor revenue has enabled the development of technology that has improved the efficiency of semiconductors and increased the performance of PV systems. The use of silicon carbide (SiC) metal-oxide-semiconductor field-effect transistors (MOSFETs) in PV inverters increases their efficiency by reducing the switching and conduction losses of transistors and diodes. Single crystal and multi-crystalline technologies are also being replaced by ultra-thin silicon and ribbon silicon technologies, and amorphous silicon and CdTe in thin-film cells is being replaced by Copper Indium Gallium (di)Selenide (CIGS).
However, further technological advancements must be made to reduce energy losses and cost–per-watt in order to extend the grid to more remote places. As this research is often supported by the government, their involvement will continue to play an essential role in making semiconductor development financially viable.
The wide array of solar panel technologies and specifications, which are available at present, is holding back big savings in the cost of utility-scale photovoltaic installations. This was a
major theme raised and discussed by over 150 industry professionals and experts at the two-day PV Power Plants EU conference in Vienna, which closed today.
The CEO of a market leading solar park constructor Belectric raised the issue on the opening day of the conference. It lead to spirited debate as he made a compelling case for module standardization. Candidly answering questions from the audience, Belectric’s Bernhard Beck implored: “There is so much cost to save, we – all of us here – must sit together to get this done!”
“The main picture that we see right now, is that we see modules as fuel in the same way that it is seen in automotive industry. We buy a certain fuel and we trust that fuel to last 25 years, to get us a certain ‘burn rate’ and see things the conventional power industry way.” Beck continued: “But at the moment, to talk in terms of fuel, we don’t have just diesel and gasoline, we have a thousand different fuel types! In PV industry we have maybe 10,000 different module types, this is the problem.”
Beck concluded that if there is a lack of standardization on a “fuel level” then there can’t be standardization in installation, and that this is a driver of costs.
Not all speakers agreed entirely with Beck’s argument. Photovoltaic technology researcher Anna Rosa Lagunas, from CENER in Spain, countered that different module technologies are needed to suit different climates. “Standardization of course, but we have research [into photovoltaics] that is not standard. Solar resources are different in northern Europe, central Europe, Africa etc. [We need] standardization up to a certain level, but we still need different technologies for different regions,” argued Lagunas.
Both Lagunas and Beck agreed on the need to develop technologies and approaches that will assist in delivering photovoltaic-generated electricity to the grid and to utility companies. Beck introduced technologies that can stabilize grid voltage from PV Power plants currently being developed by Belectric, which he argued is a key element with the potential to address utility companies’ fears as to solar power’s grid integration.
“We see a movement from the larger utilities towards photovoltaics, on a larger scale. Just two or three years back, they would say ‘solar is too expensive’, they wouldn’t even talk to us,” said Beck. “Utilities can’t do offshore wind because they can’t get it into the grid and down to Bavaria and Baden-Württemberg [in Germany’s electricity-hungry and prosperous south] without a lot of cost and a lot of stress.
“So if we can solve the problem in a decentralized way, through voltage stability for example, we increase the amount of transferable energy through Germany. That means directly, a solar power plant with stabilizing grid voltage allows more offshore wind in the same grid. So we are the enablers of offshore wind into the southern part of Germany.
“We need to get everybody, utilities, grid providers and renewable energy into one boat, to get this game done. That is the end point,” concluded Beck.
Also addressing the issue of research and development (R&D) in photovoltaics, U.S.-based market analyst Paula Mints asked the question in her presentation, whether the industry can “sustain itself” - when module prices are falling so rapidly. While module price reductions, which were in the order of 45 percent on average throughout 2011, are revolutionizing the industry and making solar power competitive with conventional power sources, Mints added that in such an environment firms are unable to carry out vital R&D.
Mints explained the market machinations underpinning this effect in a response to a question towards the end of one of the sessions: “Prices are held down now by very high levels of inventory, very high levels of capacity, reduced incentives. The rumours of extremely low prices - that is really the reselling of inventory - and that is held down by manufacturers that are selling it below cost.” In this environment, Mints continued that, “manufacturers are going to fail” and R&D programs will stall. “Companies don’t have the money to make improvements on efficiency and truly reduce manufacturing costs.”
The USA are now implementing counterveiling duties on solar products that are manufactured in China and imported into the US. A recently published statement states that the premiums, depending on
the manufacturer, are fixed between 2.9% and 4.73% The basis for this mark up, according to the ministry, is the government subsidies of more than 30 bn USD that Chinese manufacturers like
Suntech Power, Trina Solar and other companies have already received. The ministry defends it’s decision by stating that this competitive advantage should remain balanced.
The basis for the amount of countervailing duties was determined in a study of 30 state funded programs from which the Chinese manufacturers benefited financially. The dispuit was triggered by a law suit involving SolarWorld Industries Americas Inc, the US subsidiary of German solar company SolarWorld. A final decision on the anti-dumping allegations by the Department of Commerce will me made in May or June, the current figures are therefore provisional.
The Department of Commerce has however lifted tarriffs on all modules, laminates and panels that contain solar cells manufactured in China. Whether the products are imported from China or another country is irrelevant. Daniela Schrieber, Executive Vice President of the United States Hoerner Research and Consulting Corporation (HRCC), explains the loophole of this new regulation, “since the duties can not be not levied and if the product is manufactured in China but the cells derive from another country we can assume that there will be increased imports of cells from Taiwan into China in the future. This is only one strategy to react on these challenges”. Excluded from the compensation are also thin-film modules from amorphous silicon (a-Si), cadmium telluride (CdTe) and copper-indium-gallium-selenium (CIGS).
Compensation varies from manufacturer to manufacturer
The compensation in each case will depend on the level of demand on each company. Following the decision, Suntech Power will pay the least at 2.9%, Trina Solar, the most with 4.73%.All other companies will be charged 3.61%. The ministry will insist all importers pay compensation in this amount.
Many industry expert expected much higher tariffs. Ibolya Tarsoly, Senior Reoresentitive of the HRCC said, “ In the run up to the decision much higher levels of compensation were expected so therefore the preliminary decisions for the Chinese manufactures should be manageable”. “It must be noted, however, that the US Dept. Of Commerce won’t be making the final decision until May or June. The payments could be even higher then”.
The American Association of Solar Energy Industries wants to place more emphasis on a dialogue between the governments and the industrial companies on a global level. This will allow the association to help avoid further possible escalations between different countries. From the Chinese side of things an examination of six state funded programs will be examined for unfair competition.
According to the participants of the 6th Briefing and Networking Forum in San José, 20 to 30 percent of persons in the US potentially interested in a photovoltaic system decide against an
installation because they lack the appropriate financial resources. The expiry of the Treasury Grant Plan (TGP), which was designed to help in the subvention of renewable energies, at the end of
2011, is bound to create more difficulties for the financing of systems in the second half of 2012. During the networking event, the podium speakers and participants discussed possible solutions
for companies in the industry to support potential investors.
Possibility of Financing Photovoltaic Systems via Third Parties
The well-attended networking event of Joint Forces for Solar on 19th March once again brought together numerous manufacturers, distributors and local installers. Taking part in the podium discussion were Willis He (CSUN), Nick Chaset (Q.Cells), Amy Reardon (CPUC), Matthias Altieri (Thomas Lloyd) and Randy Zechmann (CALSEIA). Together with visitors, they discussed developments on the Californian and American photovoltaic market. According to several industry representatives, various solar companies are currently exploring the possibilities of having photovoltaic systems financed by third parties.
Financing options by third parties are available from solar lease programs of manufacturers and further suppliers or power purchase agreements to possibilities provided by investment banks and stocks. But from the installers and project developers’ perspective this often leads to further complexity and fluctuant system prices. However, they also emphasized that these financing problems cannot be solved by short term measures, but that success is expected in the mid-term.
The next important topic of discussion was the increase of the net metering cap for Californian energy providers. The government recently increased the previous cap of 2.5% to 5%. During the event, Amy Reardon, manager of CPUC‘s CSI program, mentioned that the 2.5% cap had potentially already been reached. The commission is currently evaluating the economic effects and is therefore already working on alternative mechanisms for a further development.
“Both the visitors and the podium participants were confronted with several difficult questions today“ said Daniela Schreiber, executive vice president of Hoehner Research and Consulting Corporation, who moderated the Forum, “The main focus of the event lay in the financing of photovoltaic systems. Easier access to capital plays an important role for market development in the future. However, the challenge provides a multitude of possibilities for innovative business concepts for active market participants as well as newcomers from other industries. This will be visible in the coming months”, Schreiber comments.
The event organizers were for the most part satisfied with the Forum and noticed a general optimism among the participants. Now that a solid infrastructure has been created, the industry now has to deal with new challenges, such as the cap on net metering. There is much enthusiasm and will within the branch to overcome these problems, but this is often curbed by inappropriate and long legal frameworks.
The event organizers would especially like to thank the Premium sponsor CSUN, the Gold sponsor Q.Cells and the event partners CALSEIA and the German American Chamber of Commerce, as well as the media partners Renewable Energy World, PV-Tech.org, pv magazine; Sun & Wind Energy and SolarPV.TV.
International Business Forum in Sofia will focus on the European solar PV market trends.
Two reports examine the European solar PV market in 2011. They indicate slowing growth in the flagship countries and promise in some smaller regions for 2012 and beyond.
New grid-connected PV capacity worldwide in 2011 rose by 67 percent to nearly 28 gigawatts (GW), nearly 21GW of that in Europe (up 57 percent from 2010's 13.3GW), says the European Photovoltaic Industry Association (EPIA). Meanwhile, NPD Solarbuzz calculates European solar PV market growth at 18 percent overall in 2011, with a 23 percent surge in 4Q11 that will quickly result in changes in incentive policies, particularly in Germany and Spain. The difference between their numbers is explainable in how they define what is "installed" and when, or perhaps using different sets of data e.g. demand- vs. supply-side.
Total installed PV capacity worldwide topped 67GW (vs. 39.7GW in 2010), with energy output of around 80 billion kWh enough to supply 20 million households, says the EPIA. In Europe, over 50GW of PV systems were installed at the end of 2011, producing some 60 billion kWh on an annual basis. The EPIA seems confident that Europe increased its cumulative capacity base by over 50 percent.
Here's the EPIA summary of new grid-connected PV in 2011 by regions: Germany (7.5GW); Italy (quadrupling to 9GW of newly connected systems); France (1.5GW); the UK (700MW); Belgium (550MW); Spain
(400MW); Slovakia (350MW); Greece (350MW), with particular strength in the residential segment (60MW); Bulgaria (80MW) - small but growing PV capacity.
Growth for all countries will be triggered by two factors: reduced incentive tariffs means less public funding needed to build out individual markets, and as solar PV approaches "grid parity" with retail electricity prices in some markets, investors will become less dependent on public funding.
For the first time, a Chinese solar module producer, Suntech Power, has received the independent seal of approval “TOP BRAND PV”. In the most important European sales markets Germany, France and
Italy, Suntech ranks amongst the best-known and most requested module brands. Furthermore, the level of recommendation – a measurable indicator for customer loyalty and satisfaction with the
product – is very strong compared to other brands. This result was gleaned from an independent survey of installers and end-customers conducted by the Bonn-based market and opinion research
company EuPD Research.
In addition to high brand awareness among end-customers, distribution depth, which refers to a strong position in brand portfolios of installers, is also very high. This applies especially in direct comparison with brands of other Chinese companies.
The “TOP BRAND PV“ seal was developed by EuPD Research in 2010 as a way of evaluating the brand management strategies of module and inverter manufacturers neutrally. The seal is assigned on the basis of a multilevel analysis founded on statements made by market intermediaries and end-customers. Manufacturers thus receive an unfiltered assessment of their own brand as well as feedback of how to potentially optimize their brand management. Suntech stands out, from an installer perspective, particularly with respect to the further recommendation of the brand and the positive evaluation of the brand. Thus, Suntech Power, a top PV module brand is now receiving the premium seal for Germany, France and Italy.
Only a few leading manufacturers who have undergone a rigorous quality check are allowed to use this seal. Therefore, the world largest manufacturer of crystalline solar modules belongs to a small group of elite brands worldwide qualified to display the seal “TOP BRAND PV”. “The fact that Suntech is one of the leading module brands in the world is not only an outstanding acknowledgment of our work which is strongly focused on sustainability but also a strong motivation”, says Vedat Gürgeli, Vice President Sales and Marketing Suntech Power Europe.
TOP BRAND PV: Background to Brand Management and How the Seal is awarded
Brand management is a term used to describe the systematic development of a brand within a target group and its differentiation from the competition. When this is done well, brand management can allow a brand to become functional, relevant and emotionally “charged”, and thus to become a true corporate value. Based on years of research experience, EuPD Research has developed a model in which over 30 individual factors are analyzed in order to quantify and evaluate brand management.
With the seal "TOP BRAND PV", the leading market research and consultation firm EuPD Research has expanded their expertise in the field of certification into the PV sector. Alongside the leading award in the field of sustainable management – the Corporate Health Award – EuPD Research now offers manufacturers in the PV branch new benefits. For years, EuPD Research has been providing companies and market-listed corporations with certificates in the fields of brand management, sustainable management and production standards. Together with business partners and test institutes, such as the TÜV Süd Life Service, EuPD Research is currently leading the market in the certification of corporate sustainability. With the seal “TOP BRAND PV”, manufacturers can distinguish themselves from the competition, appear united in the eyes of end-customers and strengthen their own brand.
Awards Help Orientation: Intermediaries and Buyers Trust Seal of Approval
In a competitive market, seals of approval such as the “TOP BRAND PV” seal do not just offer benefits for manufacturers – intermediaries such as installers can also differentiate themselves once they have proven that they are offering high quality brands. This generates extra marketing benefits without additional costs. For end customers, the quality seal offers a point of orientation in a highly differentiated market. The seal is both easy to understand and recognizable for the customer.
The developments of the Californian and the US PV market will be the topic of the 5th PV Briefing & Networking Forum USA on February 14th, 2012 at Long Beach, California. The event of the
Joint Forces for Solar initiative will focus on the relationship between installers and suppliers and provides the perfect networking platform in the framework of the Solar POWER-GEN &
Renewable Energy World Conference & Expo.
Expiry of Treasury Grant Program (TGP) challenging market participants
With the expiry of the TGP at the turn of the year, one of the main drivers of PV market growth within the previous two years comes to a close. Between 2009 and 2011, the program funded solar electricity projects with more than 1.4 billion USD and was responsible for approximately 1 GW of newly installed capacity. Due to the expiry, investments in PV systems will be less attractive. A decrease is expected in the field of system sizes above 50 kW because the main focus of the TGP was on this segment. What further impacts the expiry will have on the Californian and the US market will be discussed at the 5th PV Briefing & Networking Forum USA at Long Beach.
Successful in a tough market
The event will start with a micro view of the Californian market - the presentation “How to succeed in the Californian solar market”. Even when California was the most popular market for PV technology in the past and will remain it in the future, successful strategies are needed in order to compete among the huge number of solar companies on this market.
The following part of the program relies on active participation from the audience and is the basis for the success of this event series. The panel discussion “How to optimize the supplier-installer relationship“ deals with topics such as end customer satisfaction, product portfolios and the procurement management of Californian installers, as well as adequate marketing in the downstream and upstream segment.
The event will close with a presentation by Thomas Koerner, General Manager of North America for Astronergy Solar, on “Best practices and sales strategies to enhance business in the US”. He gives an overview of why it’s essential to develop and to implement strategies beyond module manufacturing in order to support and to keep the various market channels in the US competitive and to grow in this environment.
Special thanks are expressed by the initiators to premium sponsor Astronergy Solar, gold sponsor Q.Cells and to CALSEIA, XeroSolar, German American Chambers of Commerce as well as Media Partners Renewable Energy World, PV-Tech.org, pv magazine and Sun & Wind Energy.