Global PV cell production grew by 36 percent from 2010 to 2011, according to a March 26 market survey.
The survey by PHOTON International found that PV cell production rose from 27.4 GW in 2010 to 37.2 GW in 2011. Despite the rising capacity, last year was actually the smallest year-on-year growth rate since 2003.
The survey also found that Asian manufacturers continue to dominate the market, with six out of the top ten coming from China, and two from Taiwan. This was the first year, since PHOTON began it’s survey, that no European or Japanese PV cell producers made the top ten.
“The days of solar cell production in western countries are numbered,” says Michael Schmela, editor-in-chief of PHOTON International. “Like other commodities, solar cell production will continue its rapid shift to low-labor-cost countries in Asia, especially China.”
Cell sorting at a Trina Solar facility. Credit: Trina Solar
According to PHOTON, falling PV prices and market oversupply will continue to work in Chinese firms’ favor. Thus far, market consolidation has been most damaging to western firms, with many PV manufacturers reducing production or going out of business over the past few years.
PHOTON predicts that demand will not catch up to supply in the short term, thanks in part to cuts in subsidies for solar in Europe and the U.S.
“PV companies had better find partners, new parents or subsidiaries to be able to develop new business streams and expand into up-and-coming solar markets. Otherwise they won’t have the strength to weather the storm,” says Schmela.
The survey predicts the current trends will continue in 2012, with Chinese cell manufacturers likely to take over the first five places in the rankings, and the two Western firms (First Solar and SunPower) descending and moving a majority of production to Asia.
A Gloomy Outlook
The predictions of continued low PV prices were echoed at PHOTON’s 7th PV Investors Conference in Berlin, Germany. According to industry stakeholders at the event, declining political support for PV in key markets will continue to take a toll, and PV manufacturers will continue to face losses throughout 2012.
“Manufacturers will struggle to make money in 2012,” said Martin Meyers of PHOTON Consulting. He predicted that operating losses would fluctuate between 40 and 30 percent of revenues, and said 2012 would be “very chal