Photovoltaics cell and module manufacturers

The entire know-how of the former world market leader Q-Cells will go to Hanwha Group, Korea. Photos (2): Q-Cells Size matters The shakeout in the and module industry is in full swing. While the number of companies and production locations shutting down in the Western world is increasing, the capacity expansion in the Far East seems to be unbroken. Size in combination with a good sales network has become the key to success for surviving in the current storm. The trade war with already looming on the horizon is adding to the uncertainties.

ince 2010, a number of 25 companies with agreement with the union representatives, Solsonica crystalline production locations in Europe has has decided to send home many of its 130 employ- Sbeen forced to file for bankruptcy of which 20 ees. In Europe, the number of module production fa- went bankrupt in the year 2012. Even corporate cilities, which are located in 21 of the 27 EU member groups, that is, multi-industry companies that gener- states, has been steadily decreasing. ate profits in different segments and diversify their risk, have not been excluded from the development. Strong partners needed “Due to the severe deterioration in market conditions over the last months, Schott Solar AG will be with- While almost all the market participants had to ac- drawing from crystalline PV manufacturing in the cept losses and write off unsold inventory, others course of the year,” says Klaus Hofmann, Corporate hope to return to the start with a new and strong part- Public Relations, Schott Solar AG. The decision of ner. Shortly after filing for insolvency, Scheuten Solar Schott’s Board of Directors will affect around 870 em- announced that it would take a short absence and be ployees worldwide, of which 80 are located in Mainz back on track. Scheuten’s new partner is Aiko Solar, and 140 in Alzenau, . The aim is reportedly a China-based solar cell producer with a capacity of to avoid compulsory redundancies. Schott’s thin-film 600 MW. According to the company, Aiko Solar, which production in Jena will not be affected, it was said. also owns Powerway Renewable Energy, will use ­According to Hoffmann, the company is currently Scheuten to round off its portfolio in vertical integra- looking for an investor to buy its plant in the Czech tion. It is hoped that the “East meets West” partner- Republic. Others, like Solsonica, try to gain time with ship will combine the strengths of both companies. a reduction or suspension of working hours. In a “Scheuten Solar’s strong brand, innovative product press release, the parent company EEMS announced portfolio and its more than ten years of experience that the Italian solar cell and module manufacturer will be paired with Aiko Solar’s financial strength and has “drastically” reduced its production output. In the global EPC experience of Powerway Renewable

54 Sun & Wind Energy 10/2012 Energy”, says the company in a statement keeping in mind what has been built up by to market and media. Q-Cells is another the Top 10 companies, it quickly becomes company that has found opportunities in clear that these major players have taken a Asia. The former world leader in solar cell nearly insurmountable lead,” says Beebe. Solar production will be taken over by the Korea- In addition to the capacities and the result- based Hanwha Group. ing economies of scale, the ­Chinese These acquisitions have one thing in ­managers believe that there are also other Solutions common: besides the new flows of capital, benefits that come with a company’s size. the companies are growing in size and Size opens up new customer groups, says gaining access to new sales channels. The Qu, who has more than ten years of experi- top tier companies in the solar cell and ence in the solar business. “When I found- module segment are following the same ed Canadian Solar in 2001, we had only strategy. “Suntech is a highly competitive one major customer. Today, Canadian ­Solar company that has to defend its position has hundreds of customers from all around against Chinese as well as European man- the world and its customer base is steadily ufacturers,” says Andrew Beebe, Chief growing. Insurance companies, for exam- Commercial Officer (CCO) of the company ple, conceive of solar systems, such as that claims to be the world’s largest solar ­solar parks, as a safe investment. These manufacturer. After the bubble began to solar parks incorporate modules carrying heat up in 2009, many newcomers contin- the brands of established companies,” ued to enter the market, says the ­Manager. says Qu about the trends. He compares the development of the solar Despite the global overcapacities, the industry with the New Economy. “It is a China-based companies are not the only great challenge and means a lot of effort newcomers gaining shares on the solar for major companies to defend their markets. Another example is Foxconn, a ground against these newcomers. It does Taiwan-based player that recently attract- not really matter how many module manu- ed attention. The world’s largest supplier facturers from China enter the market. The of electronics products, including for process is very similar to the communica- ­Apple, announced the inauguration of its tions industry where the Internet renewed first module factory in China’s global networking. There was a flood of Province in May. The plant was launched newcomers. Yet no one returns to the old with a capacity of 400 MW. Further produc- ways of communication. did not tion locations are planned for Jiangxi exist and Microsoft was still at the begin- ­Province and Shanxi Province. Foxconn is ning. But today these companies rule the ambitious to expand its capacities up to a market.” It’s clear that only a few will sur- total of 5 GW in the short term. vive the solar shakeout, says Beebe. Qu is sceptical of such announce- Shawn Qu, Chairman and CEO of ments. They have to be followed by action ­Canadian Solar, holds a similar perspec- after all. “Canadian Solar has supplied tive: “Only the strongest and the most 1.3 GW of PV modules in 2011 and that’s competitive companies will be able to what matters to the customer. This year reach the finish line. However, it’s not it’s expected to have a significant growth ­going to be a fast process, it will take some Your Competent time.” The capacities that Qu is talking about remain an insurmountable chal- Partner in Sealing lenge for many manufacturers active to- day. “Production capacities in the range of and Bonding 400 MW to 500 MW are currently needed to achieve medium economies of scale. Qu believes that a minimum of 1,000 MW is today’s global standard. Lower capacities concern usually only niche products. Size opens up new customer groups

Beebe at Suntech believes that one of the consequences of the opinion expressed by For Dr. Shawn Qu, the solar sector is his solar colleague is that a number of getting increasingly global. Not just in the Sika Services AG, Tueffenwies 16, smaller China-based companies will begin markets, but also on the different stages CH-8048 Zurich, +41 58 436 52 87 to disappear again from the market. “If we of the production chain. www.sika.com/industry take a look at the total capacities, while Photo: Canadian Solar

Sun & Wind Energy 10/2012 55 cell and module manufacturers

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from last year.” Beebe also stresses been disconnected from the industry’s efforts to stay that an expansion of this size takes competitive. “The European solar industry employs a many years. “Ultimately, it increases high degree of automation and is absolutely capable the risk for everybody active on the of competing with the Chinese manufacturers under market,” says the Manager. He be- fair market conditions. But if some Chinese compa- lieves that the installed capacities nies sell their crystalline modules 50 % below the will reach hundreds of GW in a few production costs, this is illegal dumping, aimed at years. That’s the reason, he says, why gaining market shares”, Nitzschke underlines. some of the major corporations, in- On a quarterly basis, the market researcher EuPD cluding Korea-based Samsung and publishes its “European Installer Monitor Price LG, keep investing into the market. ­Index”, based on data from the installer segment. “However, the profits are no longer as The price history reveals that the index has decreased high as they used to be only a few by 20 to 23 % in 2011 in the major European core years ago.” markets. On average, the prices had ranged at less than 1 €/W in the last year. But there are important Prices not tied to differences depending on the origin of the module. competitiveness While a crystalline module made in Europe by an es- tablished manufacturer had cost up to 1.2 €/W in This exactly is denied by Milan 2011, the price for no-name products from China, de- Nitzschke, Vice President of termined by the marketplace pvXchange (now ­SolarWorld and President of the EU ­sologico), was only about 0.81 €-ct/W. This trend is ProSun group, which has successful- continuing in 2012. Today, the average price achieved The dumping prices have ly filed an anti-dumping complaint against Chinese ranges at only 75 to 85 €-ct/W, which covers more or become visible to all solar companies at the European Commission. He be- less the production cost, excluding sales and market- market participants. lieves that China is trying to establish a monopoly in ing. But the pressure from China is unbroken. A sur- Photo: Europressedienst the production of solar modules and that this is rec- vey conducted by SUN & WIND ENERGY among 50 ognized not only by the Koreans but by manufactur- Chinese module manufacturers during the trade ers around the world. “The aggressive behaviour of show Intersolar showed that the cheapest modules the Chinese companies in the world markets is taking cost only 44 €-ct/W and are sent to the installers free away the air to breathe for other manufacturers,” of charge. Following allegations from EU ProSun and says Nitzschke. These companies are reacting by re- 25 European equipment producers, the vising their investment plans. Nitzschke is positive European Commission has meanwhile begun an anti- that, if no action is taken against the price-dumping, dumping investigation. it will make the global solar industry disappear in the The consequences of declining prices and profits medium term, with the exception of China. Over the are also visible outside of Europe. Financial experts last two years, says Nitzschke, the price trends have estimate that the ten largest producers in China have

PV industry 2012

As in the previous years, SUN & WIND ENERGY has again looked at the global silicon and module sup- pliers and their capacities. This year’s survey also includes studies and analysis reports from com- panies such as or IHS iSuppli. In total, the world map identifies the production lo- cations of 140 solar cell, 370 module and 80 thin film manufacturers. However, a poor market situ- ation in the current year has made the manufac- turing industry rather cautious, which means that many companies preferred not to make concrete forecasts on the full year or beyond. To this must be added the effects of the anticipated EU anti- dumping action planned against Chinese manu- facturers, which has already become tangible. At the end of 2011, the solar cell manufacturers ­arrived at a total capacity of around 63 GW, while the module industry reached a capacity of about 70 GW. The suppliers in the thin-film module seg- Clearance: the thin film subsidiary Solibro was bought by China-based Hanergy ment arrived at a total capacity of 10 GW. Holding Group.

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Top 10 module manufacturers ­solar company, has already announced the closure of its thin-film factories: “As we cannot assume that Company Capacity in MW 2011 Capacity in MW 2012 the current market conditions will change in the long LDK Solar Co., Ltd 3,000 3,000 term, the Executive Management Team at Schüco Holding Co., Ltd 2,450 2,450 ­International KG has taken the decision to cease its Green Energy Holding Company Limited 2,400 2,450 own production and R&D of thin-film products“, the Canadian Solar Inc. 2,118 2,300 company states in a press release. Meanwhile, the total number of manufacturers across the various 1,900 2,400 technology forms has dropped down to 80 in the thin Sharp Corporation 1,575 1,575 film segment. Hanwha SolarOne Co., Ltd. 1,500 1,500 Co. Ltd. 1,450 1,450 US and China are the future JA Solar Holdings Co., Ltd. 1,200 1,500 Jabil Circuit 1,020 1,020 For Beebe, the solar industry is still vibrant. “We have gone through rapid developments over the last ten years. If you look at countries like England, Italy, Top 10 cell manufacturers Spain or some parts of Germany, our customers are already realizing their projects at grid parity. Some Company Capacity in MW 2011 Capacity in MW 2012 people in the industry have been waiting almost 30 JA Solar Holdings Co., Ltd. 2,800 2,800 years for this to happen.” Beebe is optimistic that Suntech Power Holdings Co., Ltd. 2,400 2,400 things will soon improve. He believes that the US Yingli Green Energy Holding Company Limited 2,400 2,450 market, in particular, is poised for growth and will re- Trina Solar 1,900 2,400 place established markets such as Germany as a fu- ture market. “This year, we already expect 3 GW in the LDK Solar Co., Ltd 1,800 2,200 United States. The difference to others is that the US Canadian Solar Inc. 1,500 2,100 market is based on a savings principle and not on Hareon Solar Technology Co., Ltd. 1,500 2,100 earning subsidies. Germany’s Renewable Energy Law Motech Industries Inc. 1,500 1,500 was certainly a successful process, but also expen- Hanwha SolarOne Co., Ltd. 1,500 1,500 sive. In the United States, the profits are gained by Jinko Solar Co. Ltd. 1,450 1,450 spending less on energy, which is far more sustain­ able,” says Beebe. For Shawn Qu, the greatest chal- lenge, including on the path towards grid parity, will Top 10 thin film manufacturers be overcoming the financing problems. Here, the in- dustry has to open up new avenues to bring projects Company Capacity in MW 2011 Capacity in MW 2012 underway. Qu believes that the first steps have al- First Solar 2,376 1,680 ready been taken in the United States where private Konarka Technologies Inc. 1,000 1,000 capital is increasingly available through funds. Solar Frontier K.K 980 980 China’s industry has by no means lost sight of the Sharp Corporation 480 640 domestic market, targeting a total installed capacity of 21 GW by 2014, which would make an annual new- GS-Solar (Fujian) Company Lmited 300 400 ly installed capacity of 6 GW necessary. This would re- Auria Solar Co., Ltd. 245 525 quire a substantial increase compared to the current QS Solar 200 200 2 GW that are newly installed per year. But even then, Solyndra 200 300 the demand would not be enough to sell the full mod- Trony Solar Holdings Company Limited 265 265 ule production of 2011. More than 80 % is currently United Solar Ovonic 178 178 exported to Europe where the demand reached 22 GW in the same year. Source: IHS iSuppli Corporation, Many experts believe that 2013 will be the most company data accumulated liabilities in the range of US$ 17.5 ­bilion. challenging year, which is when the European While a bankruptcy law comparable to Europe does ­Commission is expected to come to a decision. Until not exist in China, the central government provides then, the policy-makers, encouraged by the financial domestic companies with funding to keep the indus- crisis and the supposedly lower production costs for try running. According to an analysis by Mercom solar modules, will continue to scale back state sub- ­Capital Group, the major Chinese companies have sidies and this will further increase the pressure on received credit lines and loans worth about the smaller industry players. “At the beginning a ­little US$ 40 billion from China’s state banks between bit sweet, but in the end very bitter, as the German 2010 and September 2011. It should also be noted philosopher Schopenhauer said beautifully,” says that layoffs such as LDK’s where 5,500 jobs were lost Beebe about the trends. “I think the same will occur are not unusual in China. But the crystalline market in the solar industry and that it will be inevitable. It’s is not the only one in trouble. The price decline has the normal competition everywhere around the world also eliminated the cost advantage of thin-film mod- and it has only just begun.” ules. Schüco International KG, a Germany-based Michael Forst

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