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Top 10 module suppliers in 2017

Following an extensive research process over the past couple of weeks, we can now reveal the top-10 module suppliers (by shipment volumes) for the calendar year 2017.

The final listing – and the underlying numbers – confirms the trends of recent years and the continued dominance of our self-penned Silicon Module Super League (SMSL) group.

This article shows the relative rankings of the top 10 module suppliers, and discusses the implications in terms of 100GW-plus annual deployment, further trade-related barriers in 2018/2019, and whether we have reached a tipping point where having anything less than multi-GW levels of supply will soon become a thing of the past.

Defining the terminology

Module supply is based on shipment volumes, to both in-house projects and third-party sales. It includes modules manufactured in-house by the respective companies and product that is produced under supply arrangement by OEM/contract manufacturers and subsequently rebranded by the final module supplier/seller.

Supply is based on factory-gate shipment, independent of downstream inventory levels that routinely fluctuate these days on a country-by-country level, influenced by specific interconnection tariff adjustment deadlines and trade-case based timelines for importing.

The full analysis therefore requires much more understanding of company operations, the share of internal modules to project businesses (or pure play EPC work), and the levels to which, for example, companies in Southeast Asia have been utilized for non-Chinese based module assembly.

Compared to a few years ago also, fewer companies are reporting total module shipments, or failing to reveal how much third-party module supply is being used in downstream projects. This also requires a more traditional market-research effort, than simply reading off sporadic and unsubstantiated module data coming out from the companies at random times.

However, despite all this, the top-10 listing has become a relatively simple exercise this year, owing to the fairly significant gaps in shipments between the relative suppliers; any final adjustments at the ±200MW level that end up being reported in March filings are unlikely to make any difference to the rankings.

We have further cross-checked our data with a range of credible industry sources and believe that our listing represents the most accurate and correct picture of leading module supply volumes and rankings for 2017, despite the fact we are just two weeks into 2018 now. Any minor amendments will be discussed on PV-Tech, should they alter any of the data behind this feature.

The 2017 rankings

The top 10 list is shown below. Nine of the companies were top 10 suppliers in 2016, with Risen Energy the only new entrant in 2017.

Shown also are the seven companies we identified in the past 12-18 months as the companies that we expected to be in the 4GW+ annual shipment level during 2017, forming the exclusive grouping we named as the Silicon Module Super League (SMSL).

Our forecast, methodology and selection of companies (making up the SMSL) have proven 100% accurate in this respect.

Indeed, only the top seven companies shown (all SMSL members) shipped in excess of 4GW each during 2017. It begs the question of whether we do indeed need to set the GW marker higher next year for the SMSL, or increase the number of companies included. We will review this in the coming months as we forecast in greater detail what is likely to unfold for module supply during 2018.

The main reason we segmented the SMSL companies was done so we could analyse the tactics, technologies, cost, pricing, etc. for this specific grouping, as the benchmark for all the other module suppliers in the industry. The importance of this is likely to only increase during 2018 and beyond.

More China-centric than ever – so much for trade cases!

In 2017, the Chinese company contributions to the top 10 module suppliers ranking were greater than ever seen before in the PV industry. Nine of the 10 companies are Chinese run operations, with only Hanwha Q-CELLS offering any non-Chinese elements.

Hanwha of course made its meaningful entry into the PV industry a number of years ago by acquiring Solarfun (Chinese), prior to the acquisition of Q-CELLS, rebranding to Hanwha Q-CELLS, and subsequently setting up GW-based cell/module operations in China, Malaysia and South Korea.

The 90%-plus dominance then of Chinese run companies in the top 10 for 2017 should beg the obvious question: why? Or how, given we have trade cases impacting major overseas markets, such as Europe, the US, and (start/stop) within India.

There are two reasons to explain this.

First, most of the top 10 module suppliers have company-run operations in Southeast Asia (Malaysia, Thailand and Vietnam) or have OEM arrangements with China-financed operations in Vietnam. Alone, this overcomes both European and US legacy import restrictions.

However, the other major reason is the China market, and the fact that only Chinese module manufacturers play in this segment. When this one country is accounting for more than 50% of global module shipments, it does not take a rocket scientist to conclude that multi-GW Chinese cell/module makers will be all over any global top 10 ranking for 2017 (and 2018).

JinkoSolar, Trina Solar and Canadian Solar: top 3 for 3 years running

Although there are many similarities in the companies within the top 10 ranking table – compounded by the fact that nine are Chinese run operations – the top 3 form an exclusive top-tier ranking that is differentiated from every other module supplier globally.

In the past three years, JinkoSolar, Trina Solar and Canadian Solar have been the top 3 module suppliers to the solar industry and by some margin. These companies offer something that no other module suppliers have today: global brand recognition.

Indeed, with China more than half the global end-market for module supply, the leading global suppliers are by default Chinese, since the prospects of a non-Chinese produced module supplier having any meaningful sales in China are almost zero.

Therefore, JinkoSolar, Trina Solar and Canadian Solar can be regarded today as the three companies that are truly driving global sales into all the key end-markets, with established sales and marketing channels that remain the envy of most challenging competitors, in particular other Chinese suppliers. They set the benchmarks for all other Asian PV module suppliers, including the other companies in the top 10 listing above.

Is consolidation a factor yet?

Every year, the topic of consolidation comes up. And each time, the answer is a resounding ‘no’. Indeed, this can be seen in 2017 again.

Yes, the top 10 module suppliers shipped more than 57GW in 2017, approaching a share of almost 60%, above the levels seen from the top 10 in recent years. But this should not be confused with consolidation in the number of companies offering modules to the industry.

The past two years has seen many more companies enter the industry (as prospective GW-level module suppliers) than companies that have exited the industry (through insolvency or acquisition). Going into 2018, we still see new entrants, in particular in China, stimulated by domestic drivers to create high-efficiency platforms based on n-type architectures, or sub-GW cell/module producers in China accessing funds to move to the multi-GW level.

If the industry’s 2018 deployment is to be shaped by module shipment growth within China (uncapped), then the prospects of 60GW-plus being shipped in China is highly likely, as part of global supply this year that approaches the 120GW mark.

Companies no longer in the top 10

Being a top 10 module supplier these days excludes anyone not at the 3GW level. By default, this rules out many of the companies that have GW-level share outside China and appear to the outside world as top 10 type entities.

Companies that have featured in the top 10 listings of recent years, but are now well below the 10GW marker from the top of the leaderboard include: First Solar, Renesola, Sharp, and SunPower. Of these companies, only First Solar has a roadmap to strongly increase module shipments in the next few years.

Last year, we featured a non-China (end-market) top 10 ranking table for module supply. The case for this in 2017/2018 is equally valid, with companies such as First Solar, SunPower, and REC Solar (in particular) seeing an addressable market these days that is 50% of the global market, or less if you remove the ASP-depressed Indian market. This exercise will take more time to conclude, and we will cover this on PV-Tech in detail once the final data is obtained by our research team.

What to expect in 2018

Looking at 2018 forecasts across the industry, the top 10 module supplier listing for this year is likely to consist of the same ten companies making up the 2017 ranking list. Much of this is coming from the continued growth in China, with the industry as a whole in 2018 looking remarkably like 2017, from a China versus non-China shipment landscape.

The main difference this year however will be the technology mix making up the likely 120GW of production, in particular what 60GW may look like in China, and how much of this will come from n-type capacity being ramped up today.

We continue to monitor the rapid shift to multi-PERC, completing diamond-wire sawing on multi lines, a greater number of half-cut cell designs, and more glass/glass and bifacial variants: this is all happening now, and many of these will simply drive mainstream module supply going into 2019.

The wildcard for 2018 is all about n-type, and China action. This is what will make 2018 different to 2017, regardless of the success of the new n-type GW factories being ramped up. While some of the noises may sound similar to those being voiced ahead of failed thin-film plans of the past, the difference here is that we are c-Si based (with potential n-type wafer supply available if needed) and the end-goal is efficiency (not cost) driven. Furthermore, the China operations would appear to be government, state and investor backed.

Several GW of heterojunction capacity in China at the start of 2019 certainly has the scope to be disruptive, from polysilicon consumption through to p-type PERC upgrade potential. The risk in ignoring today is simply too high.

PV CellTech 2018 to explain the technology landscape

The third PV CellTech conference takes place on 13-14 March 2018, in Penang, Malaysia, and the agenda has been configured specifically to address what to expect from cell technology in a 120GW production landscape, and where p-type and n-type mass production metrics are moving in the next 12-18 months.

A major part of this includes hearing from the n-type action in China today, benchmarking against p-multi and p-mono advances. The agenda features the leading multi-GW cell producers to the industry today, key equipment and material suppliers, and the research institutes driving current technology-transfer projects in the factories across China.

To take part in the event or to attend the two day conference, please follow the links at the event website here.

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PV manufacturing capacity expansion announcements collapse in Q3 2017

After the significant upwards revisions made to global solar PV manufacturing capacity expansion announcements in the first half of 2017, which we reviewed in a previous blog, the third quarter was characterised by much more tempered plans. The ‘Silicon Module Super League’ (SMSL) continued to execute on previously announced plans with some adjustments, while others in emerging markets such as Turkey and India retained grandiose nameplate targets but initial ramps remained small.

July review

The month of July proved to be the most active for new capacity expansion announcements in the third quarter of 2017. Total plans reached 3,001MW, which included 1,000MW of new solar cell capacity, a total of 2,000MW of dedicated module assembly and a nominal 1MW of advanced integrated manufacturing 4.0 R&D facility in California, opened by SunPower Corp. 

Turkish solar company Smart Energy Group was reported to have established a Joint Venture with China-based Phono Solar (part of SUMEC) to build and operate an initial 400MW module assembly plant with future plans said to take capacity to 1,200MW. The assembly plant would be established the Gebze Organized Industrial Zone (GOIZ). 

Also of note in July was plans by India-based Premier Solar Systems to build a 1,000MW solar cell plant with an overseas business partner. The company had also announced that it had opened a 200MW fully automated solar module manufacturing facility in Sangareddy, Telangana, India. The module assembly expansion takes nameplate module capacity to 375MW. The company has 50MW of solar cell capacity. 

August review

The weakest month for capacity announcements in the third quarter was August with only one verified announcement. India-based Heavy Engineering Corporation announced plans to build a 150MW integrated cell and module assembly plant using both monocrystalline and multicrystalline wafers. Initially, the plant will have a nameplate capacity of 150MW. Modules will be used initially for its in-house downstream PV power plant projects. 

There were no dedicated cell or module assembly plant announcements in August and none for thin film. 

September review

New announcements rebounded slightly in September. Total new capacity plans were around 900MW, which were dominated by China-based PV module manufacturer Sunport Power, which had officially started production at a 1GW module assembly plant using Eurotron’s MWT equipment for back-contact PV modules that reduce cell-to-module losses and boost module performance. The company had initially deployed a 200MW line so the new expansion accounted for 800MW of the total in September. 

Also included in September was the first fully-automated and unmanned 100MW monocrystalline solar cell line officially opened by Tongwei Group in Hefei, China as part of its most recent 2,000MW new solar cell plant. 

Quarterly review

Total third quarter 2017 capacity expansion announcements reached only around 4,122MW, compared to 28,000MW in the previous quarter.

The subdued environment was driven by dedicated module assembly plans, which totalled 2,870MW, while integrated cell and module plans, absent so far in 2017, totalled 151MW. No new thin film expansion plans were announced in the third quarter. 

India review

With a history of solar manufacturing, albeit small scale, India has held the promise of becoming a major power house for solar manufacturing, second only to China. 

With a downstream PV market in the 6GW range in 2017 and promise of much higher installation rates through 2022, the gap between capacity expansion announcements and effective nameplate capacity continues to be the one of the widest. 

Indian government data released in the second quarter of 2017 put solar cell capacity in India at just 3,164 MW, yet only 1,667MW as deemed to be operational. A similar situation existed with module assembly capacity. A total of around 8,400MW of capacity had existed in the country, while only around 5,500MW was deemed to be operational. 

As seen in the chart below 2017 has seen a significant reduction in new announcements compared to the last two years with 2016 peaking at over 17,000MW. In total we have tracked over 27,800MW of announcements in India since 2014. 

Challenges in building a manufacturing supply chain base in India that even comes close to meeting domestic demand has proved elusive. A key perennial challenge has been the capital markets but much of the projects tracked were JV’s with China-based companies as well as plans from US and Japan, which have also stalled despite the ability to tap low-cost finance in those countries. 

A key emerging challenge that has been cited for the manufacturing plans being stalled is related to the low prices tendered on multi gigawatts of downstream power plant projects. Simply put, the winning bids are lower than potential manufacturing costs in India, not least due to the lack of a highly efficient low-cost manufacturing supply chain in the country that could match that of China. 

Having depended on low cost modules produced in China, India is challenged to compete and JV’s with major Chinese producers such as Trina Solar and LONGi Group remain suspended. 

However, new efforts by the Indian government to support domestic content requirements at the manufacturing sector through a new wave of government led downstream projects, could become the catalyst required to kick start more effective capacity in India. Uncertainties in trade cases in the US could also make India attractive to supply modules to the US market in 2018 onwards. However, further reforms, a complete and low-cost manufacturing supply chain, coupled to rational tendering all need to be in alignment before the imbalance between capacity expansion announcements and effective capacity is closed. 

Solar manufacturing 4.0

Although the third quarter of 2017 was subdued for capacity expansion plans, it has signalled an important milestone in PV manufacturing. Several facilities were opened in the quarter that relate to the concept of Manufacturing 4.0, which includes fully automated manufacturing lines and operated remotely. 

In July, Silicon Module Super League’ (SMSL) member GCL System Integrated Technology (GCL-SI) announced the establishment and operation of a module assembly workshop that was completely unmanned to test intelligent fully automated manufacturing tools and software systems. The workshop is expected to undertake tests for around two years.

The company noted that it was cooperating closely with Chinese domestic equipment manufacturers, and has independently developed and researched and developed a series of intelligent equipment and systems, which included high-speed automated tabbing machine a high-precision layout machine and robot palletizing system, In all, GCL-SI said that 26 separate systems so far developed were industry firsts.

A key aim of the tests is to achieve a 50% improvement in efficiency, a 60% reduction in online manpower and reduced processing costs by 30%. Product quality improvement targets were being set at a 21% overall improvement. The intention is to implement the improvements across its volume manufacturing operations.

In August, SunPower Corp said it had invested around US$25 million in the last 12-months on a new US R&D and pilot line facility located at its headquarters in San Jose, California. 

SunPower noted that the new facility included several high-volume production-sized manufacturing tools and high levels of automation, and specialized testing equipment, designed to support its next-generation of high-efficiency N-type monocrystalline IBC (Interdigitated Back Contact) solar cells and modules, which are being designed with greater emphasis on lower cost manufacturing.

According to SunPower, over 30 parts suppliers and equipment manufacturers located in the US supplied the facility, which is housing over 100 SunPower engineers and support staff.

In September, as already noted, Tongwei Group opened its completed high-efficiency solar cell plant (S2), which included the world’s first technically unmanned 100MW monocrystalline solar cell production line under the intelligent manufacturing term, 4.0. 

The S2 plant in Chengdu, China has an initial nameplate capacity of 2GW, which brings Tongwei’s monocrystalline cell capacity to around 3.4GW. The company also has around 2GW of multicrystalline solar cell capacity. The company also has around 2GW of multicrystalline solar cell capacity and recently completed a 5,000MT polysilicon plant expansion, bringing nameplate production capacity to 20,000MT. 

Tongwei is investing around RMB 12 billion (US$1.8 billion) in total constructing new cell manufacturing facilities at Hefei Solar’s facilities in the Hefei High-tech Industrial Development Zone in Chengdu City to provide nameplate capacity of 10GW, while a further 10GW of capacity will be housed in the Southwest Airport Economic Development Zone of Shuangliu District, Chengdu City. Construction on the new projects is expected to start in November, 2017 and production ramped in phases over the next three to five years. 

Tongwei has taken the early lead in China in investing in Manufacturing 4.0 capabilities, however much is being done behind the scenes at other major manufacturers and the learning curve is expected to take several years.

SMSL Q3 manufacturing update

JinkoSolar

Leading SMSL member JinkoSolar reported that its in-house annual silicon wafer capacity stood at 7GW at the end of the third quarter, up 1GW from the prior quarter.

Solar cell capacity as expected was 4.5GW, while module capacity did increase by a further 500MW in the third quarter, reaching 8GW. These are the expected nameplate capacities exiting 2017. Although the company claimed its next wave of expansions had yet to be determined and would be based on market demand dynamics it is highly likely new plans will be announced in the next two quarters. 

JinkoSolar is expecting to hit record shipments in 2017, having guided just short of 10GW, indicate almost a 10% global market share of module shipments and is sold out through the first half of 2018

Canadian Solar

SMSL member Canadian Solar has made four revisions to capacity expansion plans in 2017 and has also provided initial new expansion plans for 2018.

The SMSL member noted that it had completed the ramp up of a new multicrystalline silicon ingot casting workshop at Baotou, China at the end of the third quarter of 2017, with a total annual capacity of 1,100MW, which included capacity relocated from its plant in Luoyang, China. 

The company noted that it expected debottlenecking to push capacity to 1,200MW by the end of 2017, which is in line with the last two updated plans. 

Canadian Solar said that it had plans further increase its ingot capacity to 1,720 MW by June 30, 2018, and may expand to 2,500MW if market conditions justify.

Wafer manufacturing capacity had reached 3GW in the third quarter of 2017. The company had previously guided that it expected wafer capacity to reach 4GW at the end the year. 

However, Canadian Solar noted that its shift to diamond wire-saw technology, which is compatible with the Company’s proprietary and highly efficient Onyx black silicon multi-crystalline solar cell technology, helped to significantly offset the recent impact of polysilicon price increases that impact margins and so was planning to add a further 1GW of wafer production to end the year at 5GW.

The company said that its solar cell manufacturing capacity reached 4.7GW at the end of the third quarter of 2017, which was the target in its third revision to its capacity expansion plans.

However, Canadian Solar said that it planned to add additional cell manufacturing capacity at its Funing and South East Asia plants by year end, bringing 2017 cell nameplate capacity to 5,450MW, a 750MW increase. 

Subject to market conditions the SMSL said it planned to add another 1.5GW of cell capacity in 2018 to reach approximately 7GW by the end of 2018.

With respect to PV module manufacturing capacity, Canadian Solar is adding almost 1GW of nameplate capacity more than its third revision made in the second quarter of 2017, which would have led to a 2017 capacity of 7,190MW. 
 
The company expects that its total worldwide module capacity would exceed 8,110MW by the end of 2017.

Subject to market conditions again, the SMSL member said it planned to add another 1,250MW of module capacity by the end of 2018, bringing nameplate capacity to 10.3GW. Canadian Solar is the first manufacturer to guide nameplate module capacity to reach over 10GW.

JA Solar

SMSL member JA Solar confirmed that it expected to achieve both cell and module  nameplate capacities of around 7,000MW by the end if 2017. JA Solar is on track to achieve full-year module shipments in the region of 6.8GW in 2017, but did not provide an update on 2018 capacity expansion plans. 

Hanwha Q CELLS 

SMSL member Hanwha Q CELLS said that it was starting to migrate solar cell capacity at its China-based facilities to PERC (Pasivated Emitter Rear Cell) technology, highlighting the shift away from standard BSF (Back Side Field) technology for higher conversion efficiencies. 

Hanwha Q CELLS noted in its third quarter earnings call that capital expenditure was being focused in its manufacturing facilities in China to enable the company to have PERC cell production capacity of 1.4GW, while retaining around 1.2GW of BSF production. Hanwha’s lead manufacturing facilities are in Malaysia and are already 100% PERC. 

Its affiliate, Hanwha Q CELLS Korea is currently adding 1.6GW of cell and module production, which is expected to provide a nameplate capacity of 3.7GW by the end of this year.

Hanwha Q CELLS in-house cell and module capacity has not increased in 2017 as the company keeps tight control on spending to return to sustainable profitability. However, with Hanwha Q CELLS Korea expansions in 2017, the group will have access to 8GW of cell and module capacity starting in 2018, up from 6.4GW at the end of the third quarter of 2017.

Hanwha Q CELLS recently reiterated that it expected module shipments in 2017 to be in the range of 5.5GW to 5.7GW.

GCL System Integrated Technology (GCL-SI)

SMSL member GCL System Integrated Technology (GCL-SI) reported it had ramped its solar cell and module assembly JV plant in Vietnam to around 800MW in the third quarter of 2017.

Critical to the market, the solar cell capacity ramp has been PERC (Passivated Emitter Rear Cell) technology with the flexibility to produce P-type multi and P-type mono cells for the residential, commercial and utility-scale markets.

The company said that its total solar cell capacity would reach 2GW by the end of 2017, which would be completely PERC-based technology based.  Currently, around one third of production is P-type multi using ‘Black Silicon’ texturing after wafers (S2 size) are cut with diamond wire. Around a third of production is P-type mono PERC, while a further third of production is flexible to customer demand. 

LONGi Group

SMSL member LONGi Group, which is leading the wafer transition to monocrystalline high efficiency wafers, cells and modules has actually increased the pace of some of its previously announced plans for 2017. 

At the beginning of the year its capacity for wafers had reached 7.5GW and would reach 12GW by the end of 2017. In the third quarter of 2017, LONGi surpassed the 12GW mark and was planning to add further capacity to meet continued strong demand. 

LONGi still expects to meet expansion goals of 5GW for solar cells and 6.5GW for modules by the end of the year. However, it does not plan to provide updated plans until issuing its 2017 Annual Report. 

Conclusion

Despite the slowdown in new plans in the quarter, execution on existing plans has been a key theme throughout the year, notably for China-based firms and the majority of SMSL members. Having continued to gain market share in 2017, SMSL members are all expected to announce record annual module shipments in 2017. 

Overall, expansion plans simply collapsed in Q3, hardly surprising due to significant level of new plans announced in the first half of the year and increased concerns over the potential imposition of restrictive trade practices in the US and India.

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Second major capex cycle underway as PV industry enters new phase of 100GW-plus annual deployment

Solar PV capital expenditure (capex) covering the midstream segments of the industry (c-Si ingot-to-module and thin-film) is now well into its second major upturn in spending, going into 2018, at a time when the industry is just about to move to a new phase in annual deployment levels of greater than 100GW.

This article discusses why this is happening, the companies and technologies driving this change, and what can be expected in 2018 and beyond.

The underlying themes and outcomes will form a key part of the forthcoming PV CellTech 2018 event in Penang, Malaysia on 13-14 March 2018.

Defining the methodology

PV capex is best analysed by removing spending on polysilicon plants, as the capex here operates on fundamentally different timelines and phasing, compared to capex being allocated to the midstream segment covering ingot-to-module spending. In addition, capex for polysilicon plants is more weighted to plant construction, than discrete process tooling.

PV capex covers factory build costs (often partially financed in Asia by autonomous regions or inward investment vehicles), infrastructure design and build out, and (mostly) production equipment tooling. Therefore, PV capex largely defines the total addressable market for PV equipment suppliers, and offers a key metric to assess market-share trends and share-levels.

The data and graphics contained within this article are generated bottom-up by PV-Tech’s in-house market research business unit that gathers the data for use within its portfolio of syndicated and bespoke research products, in addition to guiding the content and production of the PV CellTech and PV ModuleTech events.

PV capex encompasses also new manufacturing capacity and upgrade equipment spending, in addition to routine maintenance and equipment replacement spending.
Understanding the past

We have gone back 10 years to understand some of the historic trends and drivers that offer some perspective on where the industry stands moving into 2018, and that shape some of the factors that can be used to predict how PV capex will trend over the next 3-5 years.

The figure below shows PV capex trends over the period from 2007 to 2017, referenced to the annual revenues recognized by the leading PV equipment supplier of the past decade, Meyer Burger.

PV capex is going through its second major growth phase, driven by a combination of new capacity expansions, new technology introductions and upgrades to existing installed capacities.

Analysis of PV capex before 2007 is somewhat academic, as spending levels then were minimal. The first real capex cycle for the industry started in the 2007-2009 period, and was driven by a diverse range of issues.

China and Taiwan were then starting their first significant expansion phases for c-Si cell and module capacities, stimulated by demand that was coming from Europe (mostly Spain, Germany and Italy). However, while this was driving huge growth in new order intake from c-Si based tool suppliers, it was thin-film excitement that ultimately drove PV capex levels above USD$10B during 2010 and 2011.

Thin-film market-share gains were being advocated as a done-deal before 2010, and investments of USD$100M at a time were being issued to credible turn-key equipment suppliers, mostly on the back of producing panels that were well below 10% in efficiency. The numbers added up very quickly, and turn-key thin-film production lines quickly had a major influence on overall PV capex levels. Today, none of these lines are in operation.

The spending peak occurred in 2011 and saw literally hundreds of new companies making cells and modules emerge all over China. Each one of these companies saw Europe as a bottomless pit of government subsidy hand-outs that would see crates of Chinese modules shipped in volumes to ports in mainland Europe for years to come.

This didn’t happen. The industry went into chronic overcapacity and oversupply mode, resulting in module pricing collapse. Investor confidence plummeted. Operational losses were widespread. And the result was a collapse in capex in early in 2012.

It took two years for supply and demand to largely get into balance, and this period was all about cost reductions, existing capacity optimization and debottlenecking.

The downturn lasted about two years, and by 2015, green shoots were emerging everywhere with the first signs of technology (not capacity volumes) being the new impetus for the rebound cycle of manufacturing capex.

Technology driven capex rebound

The focus on new technology, both due to upgrades and when incorporated in new fab builds, since 2015 looks very different to the technologies that drove PV equipment spending above $10 billion during 2010 and 2011.

At the c-Si stage, the most obvious change has come from PERC, and by 2019, most of the capacity for both p-type mono and multi will have shifted to include rear passivation deposition, with many of the companies having a clear roadmap to bifaciality. Moving into 2020, this will become mainstream for the industry. Indeed, anyone making c-Si cells with efficiencies below 20% is likely to be left with low-cost selling options then.

However, some of the other key drivers of the current capex rebound are new technology-driven initiatives that have not been seen before, including First Solar’s shift from Series 4 to Series 6 panels and the n-type spending boom that is emerging now in China especially.

It is fair to say that n-type has always seen high levels of interest, with no shortage of roadmaps from major cell producers that tended to be largely wishful thinking. While SunPower and Panasonic largely sat back and watched many n-type start-ups come and go, only Yingli Green and LG Electronics succeeded in having n-type cell capacities in excess of 500 MW that were being operated at mass-production utilization rates.

This all changed about two years ago in China, and the first GW fabs are currently ramping up, with n-type variants spanning n-PERT and heterojunction being the main focus. Regardless of the success rates of these initial movers (many of whom have little if any experience making solar cells until now), what is certain is that we are going to see more investments during 2018 and 2019 with government initiatives in China offering the backdrop for investment security.

In fact, while previous n-type activities in the solar industry were company and R&D lab specific, the China efforts today are more collaborative in nature, or simply less prone to the commercial confidentiality that is the norm for manufacturing outside of China and Taiwan.

Moreover, efforts to use domestic equipment suppliers for n-type tool supply in China further helps to establish (albeit indirectly) an open pool of knowledge that could be shared somewhat freely by other players in China wishing to jump on the n-type bandwagon should it become a competitive threat to p-type mono in coming years.

No sign of Chinese capex slowdown

On so many counts today in the PV industry, not simply for PV capex, there are no obstacles suggesting any imminent cooling in China. The security of a 50GW-plus domestic end-market exclusive to Chinese-produced ingots/wafers/cells/modules is unprecedented, and the fact that we see new technology-driven initiatives now for n-type differentiation should not come as any great surprise.

Investments in a few gigawatts here and there for new n-type projects may seem like reckless extravagance to most outside China struggling to make the numbers balance monthly on established GW-level fabs, but within China this is almost the new norm, and not entirely out of context if one regards the entire c-Si capacity in China as a single integrated manufacturing unit.

The graphic below spells out just how important equipment spending on new capacity and technologies within China has been to the capex rebound since 2015. Remove this contribution, and we are back essentially at 2012 levels.

Equipment spending across the c-Si ingot-to-module value-chain has been stimulated by domestic manufacturing within China, with 2017 and 2018 contributions seeing new efforts to scale up n-type GW fabs.

PV CellTech 2018 to address the competitive threat from n-type activity

Going into its third year, PV CellTech 2018 has been structured to address the threat coming from the new n-type investments, and whether in particular n-PERT and heterojunction can truly offer value-added propositions versus p-mono PERC.

This issue will become one of the key themes for solar manufacturing during 2018-2020, as important as the ‘what-next-after-PERC’ question for p-mono. And behind all of this is cost and wafer supply, not to mention potential wafer thickness reduction possibilities not currently being driven by the p-type community.

Could the threat from a few GW of n-type heterojunction capacity in China, coupled with multi-GW of sub-140 micron n-type wafer supply, be the catalyst that finally drives the entire c-Si industry to make a step-wise silicon material consumption decrease that would make major inroads into the silicon component of blended module costs, and cause havoc with polysilicon expansion plans?

PV CellTech 2018 takes place on 13-14 March 2018, in Penang, Malaysia. The relevance of the event, and in mapping out the real technology trends over the next 12-18 months, is almost definitely set to move to a new level of importance.

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Technology-driven capex boom to continue in 2018: PV CellTech to explain key trends

Efficiency gains and productivity improvements are set to dominate the PV manufacturing landscape again in 2018, with strong investments continuing to flow into existing and new cell architectures, with gigawatt-level status now becoming the norm for the manufacturing segment.

The industry is going through one of its most exciting and vibrant phases of technology investment, with PV capital expenditure (capex), covering the ingot to module stages of the value-chain, set to approach USD$8 billion during 2017, almost four times higher than seen five years ago.

Furthermore, the speed of change is now happening at a rapid pace, across both c-Si and thin-film manufacturing, including both p-type and n-type, and mono and multi process flows.

All of the key topics driving this technology advancement are set to be outlined, discussed and debated at the forthcoming PV CellTech 2018 event, in Penang, Malaysia, on 13-14 March 2018; the event is set to feature many of the industry’s most respected manufacturing technologists, hand-picked from the leading companies serving the 100GW solar market of 2017.

This article outlines the output of four months of in-house research by the PV-Tech market research team, that has led to identifying the topics and agenda set to make PV CellTech 2018 the defining event for PV manufacturing technology in 2018.

Innovation at GW scale moving faster than ever

For almost a decade leading up to 2016, PV capex had flowed largely to creating factories that were mainly copies of one another, differentiated mainly by the region of manufacturing and the number of production lines being installed at any given time.

Cell efficiency increases of barely 0.2% per year were the norm, and for years, the most exciting upgrades for mainstream manufacturing involved moving from 2-to-3 and 3-to-4 busbars. Ingot casting was prevalent, slurry-based wafering was everywhere, and few differences were seen in the 245-255W 60-cell panels flooding the market.

This all changed – almost overnight – in 2015, with the key driver being the efficiency gains seen from rear-side passivation from PERC-based architectures. What unfolded then could indeed be classed as the first major technology inflection point seen within the PV industry, and one that now makes some of the blue-sky concepts of before seem entirely possible of entering mainstream manufacturing within the next five years.

The above paragraph perhaps best describes the outcome of the past few months of discussions with global technology experts and the leading technical voices within virtually all major companies driving PV capex during 2018 and beyond.

More than 100 dedicated research interviews were undertaken over the past few months, in order to ensure that the third PV CellTech event, in March 2018, will not simply capture the key issues in detail, but will serve as the basis for the industry collectively to take its first steps to move from the 100GW annual production level to the inevitability of a Terawatt industry during the next decade.

The following section summarises the main themes that will make up the session content for PV CellTech 2018. However, during the research planning for the event, another generic theme emerged that I had not heard before in my various discussions with PV technology stakeholders going back almost 15 years now.

In the past, whenever technology issues and roadmaps came up in discussion with CTOs or heads of R&D, there always seemed to be a fear-factor, or reticence, behind the answers to questions, with companies largely in competition with one another.

Recently however, there appears to be a far more co-operative stance across the industry to ensure that investments over the next few years are aligned with a single technology roadmap, similar to what has been integral to the success of more mature adjacent technology sectors such as semiconductors and displays.

This new thinking is at the heart of the agenda and speaker choice for PV CellTech 2018, and the event could indeed be the first major landmark within the PV industry in setting some collective inflection points for cell architecture choice and benchmarking as the industry moves to a truly subsidy-free environment.

Session topics for PV CellTech 2018

When talking to the industry’s key wafer suppliers, cell manufacturers, equipment/material suppliers and research institutes driving technology-transfer initiatives, there was almost unanimous agreement on the main themes that should prevail at PV CellTech 2018.

  • Supply of diamond wire cut p-multi wafers and how this is keeping p-type multi cell production competitive in the industry today
  • The availability of mono wafers, both n-type and p-type, and when the supply bottleneck will soften for planned capacity expansions or upgrades to mono
  • The transition of Al-BSF p-multi cells to PERC as a mainstream industry transition, and how this will further maintain the market competitiveness of multi as a key industry offering
  • What next after p-mono PERC? This was the question that was most commonly raised, and while not specific to p-type mono, it remains one of the most critical issues for the industry during 2018.
  • Disruption in the market, coming from the record investments today – in particular from China – for heterojunction-based cell concepts. Previously the sole domain of Panasonic (from legacy Sanyo innovations), is China poised to deliver the efficiency and bifaciality benefits of this technology, with an altogether different cost proposition and a new set of equipment suppliers and tooling?
  • What is the most economically-beneficial process flow upgrade route for p-PERT based capacity in the market, and how does this technology move to levels that p-mono PERC cannot aspire to?
  • What benefits can passivated contacts yield for n-type and p-type capacity, and how can this be implemented within existing PERC lines or new capacity expansions?
  • Are we set for a redistribution of GW-level cell capacity installations back to Europe, the US and other emerging end-markets? With trade related obstacles continuing to impact exports from China, Taiwan and Southeast Asia – and a multi-national Terawatt driven market not far away – what needs to be done globally to make cell manufacturing profitable and closer to different end-markets?
  • Following on from above, how viable is cell manufacturing today in India, Europe and the US (albeit potentially enabled via Chinese inward investment)? Can Section 201 and the new round of Indian based domestic manufacturing initiatives finally act as the impetus for GW-levels of new cell capacity outside Asia again?
  • Can pure-play cell manufacturing make money? What is happening with wafer ASPs, cell processing costs, and sales prices for cells? Are premium efficiency cells making positive operation margins or just a loss-mitigation exercise to clawing back minimal profits when selling modules or building solar farms that will only generate positive cash-flow when sold on after two years?

PV CellTech 2018 will be dominated by discussions on the above issues, and every PV manufacturer – from polysilicon production through to thin-film panel offerings – simply needs to learn the answers to these questions in order to have a credible business plan over the next 3-5 years.

The other major theme that emerged was how the industry gets aligned on a single roadmap that sees technology advances consolidated towards 25%-plus efficiency cells being manufactured as a mainstream offering. Making this reality is not going to be driven by a 1GW niche company today, but by a collective effort to accelerate current R&D into mass production.

A dedicated session will be devoted to this single topic at PV CellTech 2018, with leading technologists and technology-transfer institutes that have been pivotal to the industry getting to the 100GW annual production level. Within this context, PV CellTech 2018 will again see the latest ITRPV roadmap being unveiled, and more than ever, the audience will be fixated on hearing how this compares to the presentations and discussions over the two days of the event in general.

n-type emerges as a major focus

By far, n-type is set to feature strongly at PV CellTech 2018, with more speakers and companies talking about new GW plans than the event has seen in the past two years. In fact, about half of the talks at PV CellTech 2018 will be based on n-type activity in the industry.

In previous years, we have had talks from the two original companies that were behind n-type adoption within the industry: SunPower and Panasonic (former Sanyo).

At PV CellTech 2018, we are going to hear from a whole range of new entrants to the n-type stage, and in particular the ones now driving strong investments being made within China that started mostly last year, and are set to continue for some time.

Activity in China to ramp GW-levels of new n-type manufacturing capacity can be seen across companies such as Jolywood, Linyang, Jinergy and many others such as CIE and Clean Air, and also most of the leading p-type manufacturers with new dedicated n-type R&D and pilot production lines.

But to set the stage for n-type developments, PV CellTech will start with a keynote talk from LG Electronics, whose investments and R&D focus has been exemplary in the past few years, and has been a key factor in driving the n-type investments seen elsewhere in the industry today. The performance levels seen by LG’s n-type manufacturing in the past few years have elevated the company to the second most important n-type cell manufacturer in the industry today, after SunPower, and the talk from LG at PV CellTech will undoubtedly be a massive pull for many people in the industry alone.

There will be strong research institute representation on n-type technology transfer and routes to keep n-type performance ahead of the limits imposed on p-type mono, with three of the leading R&D institutes – IMEC, ECN and CEA-INES – on the stage, outlining how technology-transfer can best work and help new technologies be ramped up successfully.

Finally, most of the key equipment suppliers of n-type process tools will be on stage, including for the first time at PV CellTech, Archers Systems from Taiwan.

By the end of the two days of PV CellTech 2018, we hope to have answers to the following questions:

  • Which new n-type manufacturers will emerge in 2018, with GW-levels of cell capacity?
  • What technology routes are being chosen to move cell efficiencies from n-PERT well above levels seen today from p-mono PERC?
  • What is the landscape for new heterojunction mass production, with this technology now seeing its highest levels of capital expenditure ever, and benefiting from a host of leading equipment suppliers now actively driving this technology into the market?
  • How market-ready are new back-contacted schemes being pushed into the market in China, and will the new group of heterojunction advocates move directly to HJT/IBC hybrid architectures as the optimized route for GW-scale manufacturing?
  • How can we evaluate cost and profitability? Where do the n-type wafers come from and what will be the delta over p-type wafers? What processing cost targets need to be achieved in order for modules to be sold with viable margins?

In the past, many industry observers had been somewhat sceptical on new n-type plans, or had sat back and watched several companies shut down pilot operations (former Silevo and TetraSun being just two of many that fall into this category). But this is not the case today, with the current range of n-type plans being pushed ahead in Asia (not to mention the plans from former a-Si turn-key factories of Hevel and Enel/3Sun).

Anyone tracking n-type mass production activity in the PV industry today, or looking at the new entrants from a benchmarking perspective, will find PV CellTech 2018 fascinating, and simply unmissable in terms of intelligence gathering and commercial reality-checking.

p-multi advances more critical to track than p-mono PERC in 2018

PV CellTech featured strong representation in the past two years from the companies that had been first movers on p-mono PERC upgrades and new capacity expansions. Indeed, during PV CellTech 2017 last March, it seemed everyone wanted to talk about new mono PERC capacity!

PV CellTech 2018 will address What-Next-After-PERC as a key theme for the p-mono PERC capacity installed, and whether this all moves to half-cut cell technology, bifaciality or passivated contacting. However, the bigger issue entering 2018 is p-multi.

The massive growth in the PV industry over the past 12 months has prevented p-mono from simply taking market-share by virtue of end-market shipment volumes. Regardless of the new mono puller capacity levels installed in China in the past few years, this technology cannot drive the growth in module shipments that end-market economics are now creating for the solar industry as a whole.

The p-multi segment is currently going through a major upgrade transition that will see the entire wafer supply of p-multi being 100% diamond wire cut by the end of 2018, or even earlier. This makes the use of these wafers a must, not an option, at the cell level, and will certainly drive more advanced etching methods, than simply making do with the additive approach that barely helps increase cell efficiency levels.

At the same time, PERC upgrades on p-multi will be accelerated within China during 2018, and within two years, p-multi cells will have re-positioned themselves from a competitive standpoint, and be able to follow a similar rear side roadmap being pushed by companies currently operating p-mono PERC lines. The ability of p-multi (from the major Chinese wafer suppliers) to keep sufficiently below mono wafer pricing cannot be underestimated.

PV CellTech 2018 will feature keynote talks from GCL-Poly and Canadian Solar, perhaps the two companies in China that have spearheaded the competitive positioning of p-multi in the past 12 months and will continue to be the ones for others to follow during 2018 and 2019.

Networking with the industry’s leading decision-makers

PV CellTech has now become the main industry platform for PV manufacturers to convey technology leadership and ownership of the key advances that will be beneficial to developers and EPCs in the next few years.

While many companies adhere to in-house press releases to disseminate efficiency achievements, using a credible forum to fully outline these results, within a peer based environment, remains the most attractive platform that can be fully utilized not simply for marketing based purposes, but to put placeholders in the ground that could influence a more cohesive roadmap in the future.

New additions to the PV CellTech event format in March 2018 are poised to move this key issue to new levels, and full details will be outlined in January 2018, in what promises to be an unmissable addition to the third event next year. Elevating 3-5 year roadmap initiatives towards a common platform is surely something needed in the industry going forward, as industry leaders move to capacity levels in excess of 20-30GW.

Being left behind is not an option

Capacity expansions with new technologies at the GW-level demand deep pockets from investors, and the manufacturers and equipment suppliers that see themselves part of a 200GW or 300GW annual production environment cannot afford to miss the boat here.

Being out-of-synch with technology directions in the PV industry over the next few years will leave companies stranded with uncompetitive (either based on cost or efficiency) products, or as highly niche producers forced to play in application segments that largely render the company as having no real influence on the industry as a whole.

Upstream, the need to understand g/W metrics, trends in potential wafer thickness reduction, and silicon bulk material quality requirements is imperative. Polysilicon suppliers in particular tend to be the ones that need the most clarity in terms of building new plants, owing to the construction times involved, not to mention the capital investments.

If heterojunction goes big in 2-3 years, g/W metrics could see further downward trends, by as much as 40-50% compared to today, in addition to purity requirements that would force polysilicon producers to effectively move to electronic grade levels. The entire polysilicon segment could simply end up being a constant upgrade/debottlenecking and quality-improvement sector, waiting for plant capacity to balance silicon demand that moves quickly to numbers closer to 3g/W than 5g/W.

Getting involved in PV CellTech 2018

PV CellTech 2018 takes place in Penang, Malaysia on 13-14 March 2018. The first 30 confirmed speakers are shown on the event website that can be accessed here. And for those that missed some of the key moments from the March 2017 event, various downloads are available as a refresher by navigating around the homepage.

Details on how to register to attend PV CellTech 2018 can be accessed via the event homepage also.

On a separate note also, I will be delivering a free webinar on 10-11 January 2018, looking at some of the key issues that will dominate PV manufacturing and technology in 2018 and which form the sessions and topics of PV CellTech 2018. Information to sign up to one of the webinar options can be found through this link.

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Mono based PERC modules to drive bifacial market entry in 2018

The PV ModuleTech 2017 meeting starts tomorrow (7 November 2017) in Kuala Lumpur, Malaysia, showcasing the key module issues that will guide site design and construction for large-scale solar sites in the next 12-18 months.

Scanning through the speaker presentations in the past 48 hours highlights the continued drive to push technology improvements rapidly through to GW-scale module supply.

This article discusses how the industry has shifted so rapidly from a p-multi based market a couple of years ago, to one where mono PERC based bifacial modules could become a mainstream product offering exiting 2018. I also took the opportunity to catch up with the company that almost single-handedly created the mono revolution in the industry that can be seen across almost all leading c-Si suppliers today, LONGi Solar, ahead of the opening keynote presentation by Dr. Zhu Qiangzhong at PV ModuleTech 2017 tomorrow.

Mono shift was simply a matter of time

Anyone tracking the solar industry during the past 20 years has been acutely aware that mono-based solar modules are the route to higher efficiencies and panel power ratings, whether on n-type or p-type wafer substrates.

However, the only issue holding back mono becoming the leading technology by market share was the lack of a 10GW-plus low-cost ingot manufacturer that could compete at a wafer $/W level with the multi wafer powerhouse that GCL Poly had established in China.

GCL Poly, and numerous other Chinese companies that added casting furnaces during the period from 2008-2012, created a sheer volume of supply that led to p-type multi cell production completely dominating global module supply until the end of last year.

This all changed when LONGi Solar embarked on a highly ambitious, and ultimately successful, strategy that involved huge ingot pulling capacity being added in China, coupled with R&D investments that had not been seen before from an upstream Chinese company.

The timing of the capacity expansions also overlapped with cell manufacturers moving to rear-side efficiency enhancement schemes (almost exclusively focused on rear passivation layers, or what is simply referred to these days as PERC) that simply pushed the demand for mono wafers to the point that mono-based PERC module supply levels were effectively wafer-supply limited.

The industry is now moving into a period of mono-based PERC becoming more widely used in utility-based solar, a segment that has until now been largely dominated by 60 and 72-cell based p-type multi panels. Supply channels from China to India, and Vietnam to the US, have characterized the solar industry during 2016 and 2017.

PERC may simply be viewed as a bridge to bifacial mainstream adoption

Looking one step further than mono PERC (which is still largely a 2018-2019 mainstream entrance phenomenon), the speed at which glass/glass modules and bifaciality is moving with the major c-Si suppliers now suggests that almost all technology market forecasts will need to be adjusted very quickly.

For p-type cells (that dominate solar industry supply today), the ability to have both front and back surfaces absorbing sunlight (bifaciality) is simply a mouth-watering prospect for every asset owner, with many view this as free-money in a long-term hold investment strategy.

In short, while there are different routes with c-Si modules to get to bifacial performance, the easiest way to think about this is to imagine that the process upgrades used in PERC are an essential part of moving to bifacial operation in the first instance. Therefore, once PERC becomes the industry standard (certainly for p-mono, less clear for p-multi right now), then we are more than half way to bifacial glass/glass modules being rolled out in GW-volumes.

If this does happen, and the signs are very promising, it would be 2019-2020 that this would become a major issue for large-scale utility solar farms, and the technology shift would not happen over 5-10 years, but almost certainly within 12-18 months. The gains from bifaciality are potentially so game-changing that any single-sided module could quickly become obsolete in the market.

Rapid learning needed now from EPCs, developers and investors

Many developers and EPCs in the solar industry have known nothing but 60 and 72-cell p-type modules, either for fixed-tile site designs using 250-270W or 310-330W (p-dc STC) modules, made in China or Southeast Asia (Malaysia, Thailand, Vietnam).

Within two years, many of the LCOE and IRR models being used by the developers, all the way through to asset owners, will have been radically overhauled, if we move into 2020 with bifacial modules being the industry-norm.

While many voices right now are simply advocating bifacial as being just bonus-energy, this is an argument that is completely inadequate for investors that need to model energy yields to the month, day and hour over 25+ years.

Right now, the claims of rear side energy yield enhancements are unsubstantiated, as would be expected with limited data available. Therefore, the need to understand what on offer, and how to optimize plant design, is paramount. The good news is that the industry probably has most of next year to start working this out in a pragmatic way.

Since bifacial site performance may ultimately be a catalyst to certain markets that are too risky based on current site yield analyses from standard mono-facial based modules, those developers and investors that are ahead of the game with bifacial may have a significant advantage in auctions and tenders globally.

LONGi at PV ModuleTech

During the two-days of PV ModuleTech 2017, there are multiple talks and discussions on PERC and bifacial module performance and related bankability metrics.

It is therefore timely that the first talk of the event is from LONGi Solar, titled “The mono transition to high-performance PERC and bifacial modules as the industry standard.”

I took the time to catch up with LONGi Solar speaker Dr. Zhu Qiangzhong last week, ahead of his talk, and asked a few questions of what the audience can expect to hear.

How much has the move to PERC been a driver to then make the step to having bifacial modules produced in high volume?

Zhu Qiangzhong: There is … little cell production process difference between PERC and bifacial,… PERC production line[s] could be used to produce bifacial almost. We think that bifacial is ready to be mass produced…

What measures are being put in place through the manufacturing process to ensure that quality of module supply is maintained, given that both PERC and bifacial modules involve both the use of new materials and process flows in manufacturing?

Zhu Qiangzhong: [There are] new… suppliers, materials, [and] process[es],… satisfied to LONGi’s standard; the new product developing process should be controlled by [the] NPI process, and the new product should be designed to satisfy twice [the] IEC standard[s], like DH 2000 [and] TC 400. Also, the materials used in mass production should pass LONGi’s standards. ORT is also very important to control the producing process.

Are the downstream channels ready to use bifacial modules? What issues does the manufacturing industry as a whole need to work on to explain the yield benefits in moving from single-sided to bifacial operation?

Zhu Qiangzhong: We think that some customers are ready to develop bifacial systems; many research institutions have published… literature about the energy yield gain of bifacial [modules], some even [giving] the empirical formula to estimate the energy yield gain. The most important factors are ground reflectance, installation height and angle. However, we think that the system design is also very important (inverters, cables, [and] module design), because the current[s] in bifacial system[s] [are] about 1.2 times higher than single-sided system[s]. And we think that it is better to design no backside shading system for bifacial [modules].

With the mainstream adoption of bifacial modules, would this lead to the need to focus on selling kWh/$ produced rather than $/W pricing?

Zhu Qiangzhong: LONGi… only sell the front power of the module: some companies sell the backside power to customers by [adding] a factor about 13.5%, think[ing] that [a] system on… sand ground could [get] about 13.5% energy yield gain. However if the customers design the system based on [a] grass ground, they may lose [the] benefit.

When will PERC bifacial become the mainstream choice for the industry? And what will be the next stage in module performance enhancements?

Zhu Qiangzhong: We think that from [a] technology [standpoint], bifacial is ready to be the mainstream choice for [the] industry; the problem is the market [accepting] the new product. This year, we have already sold more than 20MW [of] bifacial modules to customers, and in the fixed system, customers [informed] us that they [could] get about 12% energy yield gain compared to polycrystalline modules. In… tracking system[s], customers [noted that with] bifacial modules…, they [could] get more than 46% energy yield gain, [compared to] fixed polycrystalline module system[s]. We think that bifacial [modules] with tracking system[s] [will] be the best [approach] to [overall] system performance.

The PV ModuleTech 2017 conference takes place in Kuala Lumper, Malaysia on 7-8 November 2017. Our PV-Tech team will be reporting from the event and summarizing key findings in the days and weeks following the two-day conference.

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India’s solar anti-dumping saga: The industry anticipates

India’s solar sector is on tenterhooks at the moment as it awaits the results of an anti-dumping investigation into solar cell imports from China, Taiwan and Malaysia. When the inquiry was first announced, many brushed off the threat, believing that India’s 100GW by 2022 solar target was far too precious for the Central government to consider a move that could in any way hinder its progress. However, at Renewable Energy India Expo near Delhi last week, many of the developers, manufacturers or EPC firms that spoke to PV Tech were confident that some form of trade barrier would be brought in. Top level representatives from the likes of Vikram Solar, Gensol, Sterling & Wilson, Hero Future Energies and many more were all anticipating the government to rule in favour of duties, but the actual outcome of course remains highly uncertain. An executive of one Indian manufacturer even told PV Tech that he was 99.9% sure duties would come, but admitted that experience tells him anything could happen. Another developer remarked: “Everybody knows it’s coming. There are certain numbers which are floating around, but nobody knows the real number and if anybody claims to know the number they are just fooling themselves.”

Needless to say, there are many in the industry that think duties won’t be enacted and the sector is still scratching its head at how Azure Power and other winners plan to build 500MW of solar at INR2.65-2.67/kWh (US$0.04-0.041) from the most recent Gujarat auction. Changes at the top could also pull things the other way.

Jasmeet Khurana, associate director, consulting, Bridge to India, said: “Up until a few weeks ago, it seemed that Indian government was fairly convinced about imposing anti-dumping duties. However, there have been several changes recently. Both the Minister for Power and Minister for Commerce have been changed. This is causing delays and the market is hoping for a rethink from the government.”

Khurana also noted rumours that the presiding commissioner on the trade investigation had been changed, while, the sector has yet to hear where the Minister for Commerce stands on the matter, which suggests that a government rethink is not out of the question. However, MNRE secretary Anand Kumar has expressed urgency in supporting local manufacturing, noting that India must stand in its manufacturing base to reach its target, even though it currently does not have anywhere the near the required capacity to cater for its multi-gigawatt PV market.

No doubt, last week’s US International Trade Commission decision to proceed with the Suniva Section 201 trade case will also influence the final decision of India’s policy makers, but this government also has a history of crushing PV anti-dumping recommendations as it did in 2014.

Sympathy for India’s manufacturers

Clearly, it would be naïve to guess whether any anti-dumping (AD) proposals would be enforced and at what level, but the uncertainty around it continues to affect the Indian solar sector, with developers unsure about pricing while tendering activity has all but dried out in recent months. On this anti-dumping issue, there has generally been a divide between the manufacturing side and the developers. Some antipathy remains, but several Indian developers have started to express genuine sympathy towards the plight of the manufacturers, believing that manufacturing should have been nursed in India in the same way the downstream sector was, or at least it should have been given some kind of target to aim for, to complement the 100GW PV goal.

For example, Rahul Munjal, chairman and managing director of developer Hero Future Energies said that government attempts to reduce dependency on fuel imports were merely being replaced by the dependency on Chinese PV module imports, which now account for roughly 80% of the Indian market. Moreover, if 80GW of the target were to come from Chinese modules it would result in multibillion dollars’ worth of Chinese imports, leaving bigger questions about India’s longer-term vision of becoming a 15-20GW+ annual market post-2022.

“The next best thing is to grow your own in Indian manufacturing market,” Munjal added. “Unfortunately the manufacturing base is still very small so the quickest way to get there is to put an anti-dumping duty on it today so the Indian manufacturing gets some boost. So maybe in two to four years from now we are able to produce the same products at the same price and we have a good home grown industry.”

Effects on downstream PV

Importantly, Munjal believes that downstream progress would not stop purely due to anti-dumping duties, because the price of solar is already so low. There is room for a bump that adds several paise to tariffs, while still supporting home-grown manufacturing. The government will surely be doing careful sums and projections to verify this. Nevertheless, Munjal does admit that there are a huge number of uncertain variables affecting how a developer approaches auctions right now, including the GST tax, the anti-dumping threat, module price fluctuations and currency risks.

Anmol Singh Jaggi, co-founder at solar O&M and advisory firm Gensol Group, also said that depending on the level of duties set, India would be looking at a six-month slowdown and noted: “In India all of us have great resilience so we will all bounce back in six months.”

Munjal added: “We already have a really bad trade balance with China so we need to close the gap not increase it.”

However, optimism about the industry being able to ride a bump is not shared by all. Vinay Shetty, managing director, Chinese firm Canadian Solar, which is a top three module supplier to India, said that if duties come in then many projects with low tariffs will no longer be viable.

He added: “I really don’t know how these projects will be completed by the developers who have given bank guarantees, who have signed PPAs. […] In many cases the IRRs would go negative, leave aside low IRRs, it’s just negative. So it’s not going to be good, I don’t foresee a good future when the AD duty comes in.”

Indeed developers who don’t finish projects in India face plenty of trouble, including blacklisting, high penalties and forfeiting bank guarantees.

Safeguard Duties

Of course, ordinary AD duties on imports from China, Taiwan and Malaysia are not the only threat, with Safeguard Duties, which are geographically agnostic, also on the cards.

“A more important question troubling the solar industry is whether India will impose provisional anti-dumping duties, which can potentially come in anytime now and disrupt the market,” Khurana added. “The other, more acceptable possibility, is that India will choose to go through the process for 12 months before announcing any duty.”

Being geographically agnostic, safeguard duties would also hamper attempts to circumvent AD duties by exporting modules from the likes of already well-established manufacturing hubs in Thailand and Vietnam.

The industry now awaits the Directorate General of Anti-Dumping & Allied Duties (DGAD) from the Ministry of Commerce to make its recommendations of provisional and/or final duties to the Ministry of Finance.

Would they work?

Perhaps the most important question is whether anti-dumping duties would actually achieve their aim of boosting local manufacturing or cause more damage than good. Many commentators point to a history of failure for trade duties, particularly in the US and Europe.

Ivan Saha, CTO and BU head, solar manufacturing at Indian manufacturer Vikram Solar said the firm is sympathetic to duties if they promote local manufacturing without having a reverse impact. For duties to work, current manufacturers would need to expand and new players would need to come in to India. This will happen when there is sustained market demand for domestically manufactured products in Indian projects.

Saha said: “The key here is anything that is manufactured in India has to be globally competitive.”

He added that if most Indian manufacturers do not become competitive then AD duties might give temporary relief but would then hit the industry in the long run. At present, Indian manufacturers are at varying levels of competitiveness, he said, with some struggling to compete with tier-one Chinese firms. But, if there is a mass movement towards competitiveness then the industry could flourish. This would require multiple changes at policy level to make manufacturing an intrinsic part of the 100GW target.

A representative from another Indian manufacturer said the publicized policy of allocating local content solar projects to Central Public Sector Undertakings (CPSUs) could be a huge driver. Claiming that, the touted 7.5GW of CPSU projects was just the tip of the iceberg, the manufacturer said there were enormous opportunities in defence, railways, ports and others. The source also agreed that a proper manufacturing plan was critical, but claimed that this issue is being seriously addressed by the government.

He also claimed that the new energy minister R.K. Singh, shares the enthusiasm of Narendra Modi – for whom solar is a pet project – but also recognises the importance of domestic manufacturing.

Setting up in India

India has all the raw materials it needs to have a fully integrated manufacturing base, claimed one manufacturer, and the central government has voiced plans to set up an ingot and wafer facility, possibly with some form of subsidy. While it is on the government’s mind it may be delayed for at least a year or two.

Either way, India would still need cell and module makers to come in. Back in 2015, following the Re-Invest event that was designed to lure renewables investment to India, several big name players signed MoUs looking to set up big fabs, but of these only the plans of Indian conglomerate Adani have come to fruition.

Canadian Solar’s Vinay Shetty said his firm was one of the first to consider setting up in India, looking at around five states. After detailed calculations, the firm found that manufacturing could easily be set up in India, but modules would cost around US$6-7 cents higher than in China. It looked around for who might be able absorb these higher costs, but nobody would pay it.

Asked whether AD duties and the GST tax would make setting up in India more attractive than before, Shetty said: “I think it’s just the same, maybe a little impact on cost but still I think we can’t justify maybe even a 4-5 cent higher cost. It would be there even if the GST has come in.”

China accused

The ability of China to provide modules at such a lower cost is exactly what irks some in the Indian industry. Developers can’t win open category tenders at current prices by buying locally. Moreover, prices have gone up in recent months, so Indian developers really are, as Bridge to India described it, “stuck between a rock and a hard place”.

One Indian manufacturer accused Chinese firms of selling cells and modules below cash costs for little or no profit and claimed that this had decimated the manufacturing industry across the rest of the globe, particularly in the previous stalwart zones of the US, Europe and Korea. Turkey, which has its own AD duties and manufacturing incentives was an exception, while Brazil’s local content incentives have seen big name Chinese firms set up shop locally. The manufacturer also said eight or nine out of ten panels being sold worldwide today coming from Chinese firms was a “ludicrous” situation, given that he also predicts almost every country to have gone solar within the next five years.

What China thinks

From the Chinese point of view, Canadian Solar’s Shetty said that an AD duty would be a trade barrier blocking suppliers from China, Malaysia and Taiwan, even though he claimed that AD duties had historically done no good anywhere in the world.

He said: “It may look like a protection but many a time it serves the other way – the effect is actually bad. You are going to save 1% of the jobs but 99% of the jobs lie elsewhere – those get sacrificed.”

Back in July, China’s Ministry of Commerce responded to India’s initiation of an anti-dumping investigation by labelling it an “abuse of trade remedy measures”, but also seeking to cooperate in resolving the trade issue.

Timelines

This week, DGAD revealed which companies were going to be sampled as part of its investigation and an announcement on the findings of the investigation are due any time, but proceedings have already faced delays and could drag on for some time. An announcement on safeguard duties is also expected.

Over the last few years we’ve heard much about the ‘Make in India’ programme, but this has failed dismally to benefit local PV manufacturers. It’s been all rhetoric and misplaced policy. The next few weeks are a pivotal moment in this Make in India story, as well as for the whole solar sector at large.

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10 years of R&D spending analysis of 12 key PV module manufacturers

R&D spending patterns

Combined R&D expenditures of 12 major PV module manufacturers in 2016, tracked since 2007, declined by approximately 4.4% in 2016 to US$519.3 million (see Chart1), compared to US$542.9 million in 2015. As 2015 expenditures were a new record high, 2016 becomes the second highest year of spending and 2014 the third highest. All three years highlight total combined annual R&D expenditures above US$500 million. 

Interestingly, two expenditure peaks, both above the US$500 million mark have occurred in the last 10 years with 2011 standing out at US$510 million, being the first time the US$500 million mark was exceeded and five years later in 2015, when second peak occurred. 

There were four manufacturers that reduced R&D spending in 2016 (see Chart 2), these included First Solar, Yingli Green, Renesola and REC Group. All four had also reduced R&D spending in 2015 from 2014 levels. R&D spending had bottomed in 2012, when the PV industry was going through its worst period of overcapacity, yet that year saw six companies reduced spending, many for the first time.

Notable in the expenditure decline year-on-year were Yingli Green, Renesola and First Solar, which reduced spending by 65.4%, 37% and 4.4%, respectively. 

The overall increase in spending in 2014 and 2015 had led to more companies spending above the US$20 million mark annually, which left only two companies (Canadian Solar and REC Group) below that level. With REC Group estimated to have reduced spending slightly in 2016 and Canadian Solar making a marginal increase but below the US$20 million mark, no changes at this low level occurred in 2016. 

Trina Solar was estimated to have moved into the above US$40 million to US$60 million range in 2016, which was populated by Renesola and Hanwha Q CELLS in 2015. However, with Renesola significantly reducing expenditures, only Trina Solar and Hanwha Q CELLS populated the US$40 million to US$60 million range in 2016.

The US$20 million to US$40 million range is now the most populated with six companies (SolarWorld, Renesola, JinkoSolar, Suntech, Yingli Green and JA Solar). More accurately, these six manufacturers are clustered tightly together with the lowest spender in this bracket being Yingli Green with US$21.2 million spent on R&D activities in 2016 and the highest, SolarWorld spending US$27.9 million in 2016 and before its bankruptcy and subsequent rebirth. 

In relation to the two manufacturers (First Solar and SunPower) in the top echelons of R&D expenditure the gap between the two firms has closed significantly for the first time. With First Solar reducing spending for two years in a row and SunPower increasing spending three years in a row, resulting in the two companies being separated by only US$8.6 million, compared to US$31.6 million in 2015 and US$70.6 million in 2014. 

Both First Solar and SunPower spent over US$100 million each on R&D activities in 2016, which was the first time for SunPower (US$116.1 million) and the sixth time (consecutively) for First Solar (US$124.7 million). 

On a year-on-year R&D expenditure increase basis, Trina Solar was estimated to have increased spending by around 24%, while Suntech and JinkoSolar reported the same 17.5% increase and SunPower a 17.3% increase. Other manufacturers (Hanwha Q CELLS, Canadian Solar, JA Solar and SolarWorld) increased spending in the single-digit percentage range. 

R&D staffing patterns

A key difference in 2016 to previous years covered by this report was the higher decline (9.5%) in the number of employees designated to R&D activities than when R&D expenditure also declined but at a lower (4.4%) rate.

After a major decline in the number of employees designated to R&D activities in 2013, staffing levels have rebounded strongly. Having reached an initial headcount peak in 2011 of 3,575, numbers declined to a low of 2,911 in 2013. With higher spending came increasing staffing as well as the previously highlighted, re-designation of R&D personnel at Yingli Green in 2010 and Trina Solar in 2014, which significantly weighted overall staffing levels higher.

A total of eight manufacturers in 2015 added R&D headcount. However a total of nine manufacturers (including estimated) reduced R&D headcount in 2016 (See Chart 4) These included manufacturers (Trina Solar, JA Solar, SunPower and Hanhwa Q CELLS) that actually increased R&D spending in 2016. 

The four manufacturers (First Solar, Yingli Green, Renesola and REC Group) that reduced R&D spending in 2016 also reduced R&D headcount in 2016. It should be noted that both First Solar and REC Group headcount are estimated and the reductions negligible. 

The standout reductions in R&D headcount come from ReneSola (162), Yingli Green (103) Trina Solar (188 estimated), Hanwha Q CELLS (78) and SunPower (43). 

The R&D headcount reductions in 2016 from the four highlighted manufacturers are generally due to restructuring, cost reductions and business transitions. In the example of Yingli Green, a major restructuring has been underway, resulting in a massive 3,908 headcount reduction by the end of 2016. A company in transition away from manufacturing, ReneSola also reduced its overall employee headcount by 524 in 2016. On-going cost reduction strategies at Hanwha Q CELLS led to 1,901 job losses in total in 2016.  

In contrast, SunPower actually increased its overall headcount in 2016 by 1,714. However, SunPower has since closed facilities and is undergoing a major restructuring effort. 

The total number of employees designated to R&D activities from the 12 PV module manufacturers tracked was 5,002 in 2016, down from 5,533 in 2015, a decline of 531 or 9.5%. 

R&D spending rankings in 2016

Once again there were certain changes to the spending rankings (See Chart 5) as cuts impacted the middle cluster of manufacturers, while the gap at the top may have closed sharply, there were no changes to the rankings for the first and second positions in 2016.

First Solar

First Solar once again has been ranked first in annual R&D spending, making it the eighth consecutive (2009 – 2016) year for the CdTe thin-film module manufacturing leader, despite a second year of expenditure reductions and confirms the view highlighted in the 2015 report that R&D spending would seem to have peaked in 2014.

The decrease in R&D expenditure was partially due to a lower R&D headcount but also the cycle in developing its large-area Series 6 modules, with emphasis shifting to capital expenditures to completely migrate all manufacturing (including new build) to its next-generation CdTe modules. Less emphasis is also being attached to PV systems development, such as trackers, preferring to collaborate with leading third party suppliers, especially with the Series 6 module transition.

The company is continuing to operate its ‘vertical integration’ R&D model from advanced research to product development through to manufacturing roll-out, which includes continue module conversion efficiency improvements, despite the large-area module format change. 

First Solar held two world records for CdTe PV efficiency, achieving an independently certified research cell efficiency of 22.1% and a full-area module efficiency of 18.2%.

SunPower Corp

SunPower was ranked second in 2016, the second consecutive year for the company that has the highest efficiency solar cells and modules that deploy IBC (Interdigitated Back Contact) cell technology. 

In fairness to SunPower, apart from one year (2014) when Yingli Green spent more on R&D than SunPower, it had easily been the second highest spender since 2010. 
The boost in spending in 2016 does not correlate to increase R&D staffing levels, instead its surrounds its P-Series module and new PV systems development and roll-out for residential, commercial and utility-scale downstream markets. 

The increase can also be attributed to establishing a new R&D facility at its headquarters in San Jose, California. Only recently has SunPower Corp said that it had invested around US$25 million in the last 12-months on the facility, which includes several high-volume production-sized manufacturing tools and automation, and specialized testing equipment, designed to support its next-generation of high-efficiency N-type monocrystalline IBC solar cells and modules, which are being designed with greater emphasis on lower cost manufacturing. The new facility was said to be housing around 100 engineers and support staff. 

SunPower noted that the new R&D facilities pilot line, which had already produced the first next-gen module to replace its X Series (25% conversion efficiency) solar cells (22% conversion efficiency) modules.

Hanwha Q CELLS

Despite an R&D headcount reduction, Hanwha Q CELLS moved up the rankings in 2016, due to spending almost US$50 million and Yingli Green’s continued drastic spending cuts due to major restructuring of the company. The company was ranked third in the spending rankings in 2016, up from fourth in 2015. 

R&D focus continued to be centred on P-type multicrystalline PERC and mono-PERC cell efficiency gains and production cost reduction initiatives such as migrating all capacity to the larger (156.75mm by 156.75mm) wafer size. 

Average P-type multi PERC cell conversion efficiencies have reached 20% and 22% for P-type mono PERC cells. Other R&D efforts have continued on LID and PID process limitation.

Trina Solar

Increased R&D spending in 2016 helped Trina Solar jump from being ranked sixth in 2015 to being ranked fourth in 2014. The company also benefited from the spending cuts by Yingli Green and ReneSola to move up two ranking positions. 

Trina Solar had increased R&D spending in the first half of 2016, compared to the prior year period. However, due to delisting from the NYSE the company was not obliged to provide further quarterly reports or a 2016 annual report. 

This meant that full-year 2016 R&D spending figures and R&D headcount numbers was estimated based on the first half year publically reported details. 

Recently, Trina Solar reported that R&D efforts with N-type monocrystalline IBC solar cells had led to a conversion efficiency of 24.13%, which was verified by the Japan Electrical Safety & Environment Technology Laboratories (JET). This was produced on 156×156 mm solar cells with a low-cost industrial IBC process, featuring conventional tube doping technologies and fully screen-printed metallization. In December 2014, Trina Solar announced a 22.94% total-area efficiency for an industrial version, large size (156x 156mm2, 6″ substrate), IBC solar cell. 

The company has also been developing PERC and bifacial cells in recent years and reported in 2016 that it had achieved a new world conversion efficiency record of 22.61% for a high-efficiency P-type monocrystalline PERC solar cell, independently confirmed by the Fraunhofer ISE CalLab in Germany.

SolarWorld AG

SolarWorld AG increased R&D spending to US$27.9 million in 2016, up from US$25.9 million in the previous year. Also benefiting from spending cuts at Yingli Green and ReneSola, the company was ranked seventh in 2015 but moved up two positions to fifth in 2016. 

The company has focused resources on high-efficiency P-type multicrystalline and monocrystalline PERC solar cell development in recent years including bifacial cells. However, the company realigned to focus on mono-PERC and bifacial technology. 

The company had achieved average efficiencies of over 22.0% with PERC cells manufactured on its high-throughput pilot line with 5BB and M2 large area 156mm x 156mm wafers. SolarWorld was working on conversion efficiencies above 24.0% that retained screen-printing PERC and other process improvements.

However, in May 2017 the company entered insolvency proceedings but its German manufacturing and R&D operations were acquired by former founder and chairman of SolarWorld AG, Dr. Ing. Eh Frank Asbeck, which included manufacturing and R&D operations under the subsidiaries SolarWorld Industries Sachsen GmbH, SolarWorld Innovations GmbH as well as SolarWorld Industries Thüringen GmbH.  

The new company, SolarWorld Industries plans to continue to focus on mono PERC and bifacial cell R&D and production in partnership with Qatar Solar Technologies, its new 49% shareholder. 

ReneSola

With ReneSola cutting both R&D expenditure and headcount in 2016, it was relegated to fifth from fourth in the rankings, spending US$27.3 million that was primarily attributed to continued development of technologies to manufacture high-conversion efficiency solar cells with improved performance.

The company was able to achieve conversion efficiency rates of 21.1% for P-type monocrystalline cells and 18.6% for P-type multicrystalline cells manufactured using its in-house developed solar wafers. 

However, ReneSola is transitioning its business to become a downstream PV project developer and in 2017 has announced a potential sale of its manufacturing and therefore main R&D operations.

JinkoSolar

Having been a perennial low spender, JinkoSolar was ranked seventh in 2016, up two ranking positions from ninth in 2015 after spending US$26.1 million on R&D, compared to US$22.2 million in the previous year.

The company outstripped spending by JA Solar in 2016 and was supported by the spending cuts forced upon Yingli Green as it restructured its operations. 

JinkoSolar begun research on its “Eagle+” solar modules, which are expected to have multicrystalline cells that reached conversion efficiencies of approximately 20.4% in lab tests by a third party in 2016. The company has also achieved a record P-Type multicrystalline cell efficiency of 21.63% in 2016.

The company also made a decision to increase P-type mono PERC R&D including migrating to diamond wire and ‘black silicon’ texturing. 

Wuxi Suntech

Wuxi Suntech now the PV module manufacturing arm of Shunfeng International Clean Energy (SFCE) increased R&D spending to US$25.7 million in 2016, up from US$20.2 million in 2015 after full integration into SFCE. 

R&D activities have focused on continued efficiency improvements for PERC cell technology. The company has achieved average cell efficiency of over 21%, and champion cell efficiency of 21.3% in production.

The company continues to collaborate on a hydrogenation process with the UNSW and confirmed the development and testing with Taiwan Carbon Nanotube Technology Corporation (TCNT) of a high-strength, lightweight carbon and glass fiber composite PV module frame, the first such development of its kind in the PV industry. 

JA Solar

Although JA Solar increased R&D spending in 2016 to US$25.5 million, up from US$23 million in 2015 it was ranked ninth, compared to eighth in 2015. 

Importantly, JA Solar is the only manufacturer in the group study that has increased R&D spending consecutively for the last 10 years, a remarkable feat, considering the dynamics of the PV industry. 

The company has continued to develop high-efficiency multi and mono technologies having introduced its monocrystalline PERCIUM series utilizing PERC technology with an average conversion efficiency of over 21.0%, and its multicrystalline RIECIUM series utilizing RIE (Reactive Ion Etching) texturing to enable the use of diamond wire technology on multicrystalline wafer and has conversion efficiencies of over 19.2%.

A key focus of development has been bifacial PERC-based cell and module development in 2016, which led to new product introductions in early 2017. 

Yingli Green

Major financial issues have forced Yingli Green to drastically cut costs across its entire operations in the last two years. With R&D spending cuts, Yingli Green was ranked tenth in 2016, down from third in 2015. 

However, Yingli Green continued to invest in its Project PANDA, a research and development project for next-generation high efficiency monocrystalline PV cells, established back in June 2009. The company noted that by the end of 2016, it had achieved an average cell conversion efficiency rate of 20.8% on the PANDA (N-type mono PERT) commercial production lines.

Further development is on-going to improve N-PERT cell performance with doping, passivation and metallization enhancements. Yingli’s roadmap is aiming for 22% efficiency of N-PERT cell for production.

The company also had its PANDA bifacial module receive China’s ‘Front Runner certification at the end of 2016 and is the leading supplier of the technology to date and is aiming to develop a bifacial cell with bifaciality greater that 95%.

Canadian Solar

Canadian Solar has continued to place greater emphasis on module efficiency improvements, focused on P-type multicrystalline technology and has been a perennial low spender on R&D. 

The company allocated US$17.4 million to R&D activities in 2016, up slightly from US$17.05 million in 2015. As a result the company just about traded places with estimated spending from REC Solar to be ranked eleventh, compared to twelfth in 2015. 

Canadian Solar began commercializing its in-house developed black silicon technology, Onyx technology, on multicrystalline wafers to be used with PERC technology, which entered mass production in March 2016. 

Indeed, Canadian Solar is placing a potentially risky bet on pushing ahead with this technology combination after stating at the PV CellTech conference in early 2017 that it would continue to focus on this technology in R&D. However, the company also has small-scale initiatives on N-type bifacial and heterojunction cell development. 

REC Group

We have estimated that the REC Group continued to tweak R&D expenditures slightly down from US$17.4 million from figures provided by the company that year to around US$16 million in 2016. 

This meant it traded places with Canadian Solar, almost six times larger, from a module manufacturing capacity standpoint to be ranked twelfth in the R&D spending rankings in 2016.

The company was sold to Bluestar in late 2014 and delisted from the Norwegian Stock Exchange in 2016. 

With the adoption of PERC cell technology and an ongoing transition to 100% P-type multicrystalline PERC production with half-cut cells, R&D intensity into PERC was expected to slowdown and therefore R&D expenditure lowered in 2016.

However, spending on PERC efficiency and production cost reductions was expected to account for a key percentage of R&D expenditure in 2016 and beyond. The company had focused on improving light capture of PERC cells and migrate to 5BB technology to reduced cell resistance in 2016. 

R&D efforts were expected to continue in the field of diamond wire and black silicon technology ahead of the migration in 2017. Like other previously exclusive multicrystalline manufacturers, development of monocrystalline PERC product offerings would also receive investment in 2016 and beyond. 

Cumulative R&D spending rankings and analysis

As previously highlighted in our 2015 report, we expected First Solar to exceed the US$1.0 billion mark in cumulative (since 2007) R&D spending. Indeed, First Solar surpassed that mark in 2016, reaching a cumulative US$1,027.8 million in R&D expenditure, making it the first module manufacturer to do so. 

First Solar has no equal in the PV industry for investment in R&D activities over the last 10 years.

Second in the cumulative R&D spending rankings is SunPower, which was expected to surpass the US$500 million market in 2016. Through much of the period, SunPower has been ranked second or third in annual spending and with its increased spend in 2016, easily surpassed that figure reaching a total spend of US$583.2 million over the last 10 years. 

SunPower is only the second company to surpass cumulative R&D spending of over US$500 million, a figure not expected to be reached by another company over the next four years or more. 

Due to its previous high R&D expenditure and PV market leadership position, Yingli Green is the third ranked for cumulative R&D spending. The company reached cumulative R&D spending over the last 10 years of US$356.7 million. 

In fourth place is ReneSola, having cumulative R&D spending over the last 10 years of US$322.8 million. Since 2010, ReneSola had been a consistently high investor in R&D activities, which only in 2016 experienced a significant decline, due to its business transition. R&D spending peaked in 2014 at US$52.6 million.

SolarWorld was ranked fifth with cumulative R&D spending over the last 10 years of US$269.4 million. The company had spent no less than US$25 million per annum from 2010 onwards and peaked spending just short of US$50 million in 2012. 

In the middle of the field, REC Solar, Trina Solar and Suntech had cumulative R&D spending of US$225.5 million, US$218.8 million and US$215.9 million, respectively over the 10 year period. 

Three companies, Hanwha Q CELLS, JA Solar and Canadian Solar had cumulative R&D spending of US$171.4 million, US$132.4 million and US$103.6 million, respectively, highlighting spending over the 10 year period was below the US$200 million market but above the US$100 million level. 

The only company that had cumulative R&D spending below US$100 million was JinkoSolar, which achieved a total spend of US$98.3 million between 2007 and 2016. 

What does 10 years of R&D spending tell us?

On the surface, the most telling aspect of tracking R&D spending for a decade is the lack of correlation to market leadership, notable by JinkoSolar’s current leadership position and that of Trina Solar, preceding 2016 for two years. 

Perennial laggard Canadian Solar has also supported that thesis having climbed the rankings tables (of annual module shipments) in recent years to become the third largest producer. 

At the other end of the scale, First Solar and SunPower have dominated R&D spending levels in this period and yet only First Solar topped the rankings table for a short period. Although retaining a top 10 position for many years, it has been surpassed by companies with a need to spend a fraction in R&D to be leaders.  

Worse is the position of SunPower through the last 10 years, having lost market share and ranking positions almost throughout the period without fail. 

Interestingly, both SunPower and First Solar have proprietary technologies that require custom production equipment yet both are in major manufacturing transitions. It would be highly unlikely either company could come out the other side stronger without the history of investment in R&D. 

Time will tell if that theory holds true but it is reasonable to assume that a major technology transition by the likes of JinkoSolar or Canadian Solar would not make the companies stronger given the lack of investment. 

Indeed, JinkoSolar has probably seen the writing on the wall and started a major boost in R&D spending a few years ago. This has been led by p-type mono PERC expansions and less reliance on P-type multi technologies. In contrast, Canadian Solar is sticking with P-type multi technologies, so time will tell if that strategy works. 

It should also be noted that until 2015 there had not been a major technology buy cycle with a significant migration to PERC technology and the adoption of IBC and HJ technology outside historical incumbents SunPower and Panasonic, respectively.

What we are alluding to is that 10 years of R&D spending behaviour has not forward projected market leadership, unlike what has been seen in the semiconductor industry. That said, 10 years of R&D spending behaviour in the solar industry may take longer to work its way through. Clearly, that theory rests with the likes of First Solar and SunPower over the next few years.

End of an era

Reflected throughout the 2016 report has been the increased reliance on estimated figures. When the analysis originally began, all 12 manufacturers were publically listed companies and therefore official and verifiable figures were available. 

There had been moments when estimates had to be made, such as when Suntech was bankrupt but was soon back in action in another publically listed company, enabling continued reporting. Problems occurred when REC split into two companies but these two companies remained public. 

However, a few years later, REC’s module manufacturing arm was acquired by a private Chinese enterprise and has since stopped providing the necessary figures for this report. Trina Solar, the second largest PV manufacturer in 2016 went private before having to release official figures for 2016, adding to the need to use estimates. 

The issues continued to mount in 2017, when SolarWorld entered insolvency proceedings and, although back in business, it is no longer publically listed and estimates would have to be used for the next report. The same could happen with ReneSola, with its manufacturing operations potentially spun-off into private hands. JA Solar and JinkoSolar could follow Trina Solar in delisting and going private as well. 

Already four of the twelve manufacturers have gone private and the study has become significantly less representative of the sector than in the past. The greater dependency on estimated figures would also further undermine the value of the report and its analysis in the future. 

We should all be aware of how dynamic and sometimes brutal the PV manufacturing industry can be and this report has clearly plotted some of those events over the years, not least the first major industry downturn. 

However, we have been closely watching the rise of other manufacturers in the last few years, notably LONGi Solar, GCL-SI and more recently Jolywood, all publically listed in China with the possible inclusion in a new collection of companies with those still relevant from our original group since 2007. 

With the uncertainties surrounding how many companies will still be relevant to continue with from the original group and how best to integrate much newer companies, means that it is definitely an end of era with this report, but a decision on continuing, although with new additions, will be made at a later date. 

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Innovative double-glass bifacial PERC modules by JA Solar yield cost-effectively for PV systems

The PERC (Passivated Emitter Rear Cell) cell and module technology have been widely adopted by the industry. JA Solar has been exploring innovative approaches of bifacial PERC cell and the methods of making it and has been granted two Chinese patents. Also, a series of experiments have been carried out to certify the higher efficiency of bifacial PERC modules than conventional PERC modules. 

The implementation of PERC with Al2O3/SiNx dielectric passivation stack and localized contacts on the backside of main-stream p-type Si solar cells has become the prevailing technological approach to achieve high energy conversion efficiency for Si-wafer based solar cells in the PV industry for the past few years since JA Solar broke the 20% conversion-efficiency barrier for p-type mono-Si cells using screen-printing metallization process in the middle of 2013 and started mass production of PERC cells and modules at the beginning of 2014. 

The large-scale adoption of PERC cell and module technology by the industry is primarily due to the fact that this approach is compatible with the screen-printing based manufacturing platform. This is because it only requires moderate retrofitting to the existing cell production lines, especially when the concerns over the costs of manufacturing wafer-based Si cells needs to be addressed. It is also fueled by the rapid progress in the development of high-throughput Al2O3 deposition equipment for PV application as the tools become more adaptive and affordable for the industry. 

JA Solar has since taken the PERC cell technology one step further by utilizing the unique PERC architecture to structure it into a device capable of actively admitting light from its front (sunny) side and back (shade) side in a bifacial configuration. 

This innovative approach of bifacial PERC cell and the methods of making it were granted by the National Bureau of Patents and Trade Marks of China as Chinese Patent CN103489934B in March 2016 entitled “Double-side Light Admitting Solar Cell with Localized Aluminum Back-surface Field and Methods of Making It”. 

It further enriches JA Solar’s IP over Si-wafer based solar PV cells and modules with the Chinese Patent CN101853899B, covering laser processing and screen printing of PERC cells entitled “A Solar Cell with Localized Back-surface Field and Method of Making It”. 

This innovation has led to the PV products from JA Solar being commercially available to the global market and recently expanded to include advanced double-glass modules assembled with high-performance bifacial PERC cells in both 60-cell and 72-cell formats. The volume shipment of such double-glass bifacial PERC (Bi-PERC) modules has started since the first half of 2017.

Generally, a bifacial module produces more energy than a mono-facial module with the same power rating under the same conditions. The amount of additional energy generation of a bifacial module, however, depends on specific conditions including the intensity of diffused light available to the backside of the bifacial module, albedo reflectance of the surface underneath the module, as well as the installation height of the module at the installation locations. 

Field data collected from JA Solar’s double-glass bifacial PERC modules at various locations where a number of Bi-PERC modules deployed along with the same amount of regular PERC modules with front cover glass and conventional insulating white back sheet for comparative study, have shown that Bi-PERC modules consistently out-perform regular PERC modules in terms of energy yield. 

Shown in the chart below is energy generation data from a group of Bi-PERC modules and regular modules with mono-facial cells. The rated power is ~290W for the Bi-PERC modules (measured from the front side only with the back surface covered by a black sheet) and ~295W for the regular PERC modules. These modules are installed side-by-side on the same racking system with two horizontal rails in one of JA’s testing sites with two sub-groups at heights of 1.5 and 2.0 meters, respectively.

It can be clearly seen from the above chart that Bi-PERC modules yield additional energy in comparison with the energy generation by regular mono-facial PERC modules. The transparent back side of a Bi-PERC module allows the photons incident onto the active back surface of bifacial PERC cells to make an extra contribution to the energy produced by the bifacial PERC cells assembled in the modules. 

It is also worth noting that the installation heights make a small difference in energy yield from all the modules as the higher the modules are installed, the better the performance of the modules. The difference observed at this particular location is about 0.5-1.5% relatively from 1.5 meters to two meters, most likely due to the intensity of available diffused light getting stronger as the module height is increased.

The ratio of the difference in the energy yields between Bi-PERC modules and regular PERC modules over the energy produced by the regular PERC modules is illustrated in the chart below. 

There is approximately 8-15% additional energy (energy gain) yielded from the Bi-PERC modules as compared to that from regular mono-facial PERC modules. The variation of the energy gain from module to module for the Bi-PERC is a combined result of installation configurations and site conditions, as well as the encapsulation materials of the Bi-PERC modules. 

It is also interesting to note that the ratio of energy yield from Bi-PERC over that of regular PERC is higher in the month of June than than in July accumulatively on a relative scale while the overall energy generation in June is much lower than that in July on an absolute scale. 

This can be explained as the effect of weather conditions of the geographic region (City of Yangzhou in Jiangsu Province of China) where the modules are installed, as the regional weather patterns are for many rainy and heavily clouded days in June while much less such days occur in July. Since solar irradiance is consisted of both direct and diffused lights (for instance, 90% direct and 10% diffused in AM1.5G spectrum), a bifacial module has two active sides to admit the diffused light and therefore naturally works better than a mono-facial module having only one active side in terms of energy generation when direct light is scarcely available in a rainy or heavily clouded day, resulting in the higher energy yield ratio observed in June.

The bifaciality of JA Solar’s double-glass bifacial PERC modules, defined as the ratio of the output power measured from the backside of such a module over that measured from its front side, is currently at 70-75% in mass production. 

It is primarily determined by the coverage of metallic contact grid mainly composed by Al paste on the total area of the back surface of the cells. It has to be pointed out that, while the bifaciality of a double-glass bifacial PERC module looks relatively smaller than that of a double-glass n-type bifacial module (~80-85%), Bi-PERC modules are still much more cost-effective in producing additional energy in terms of US$/W. This is because making Bi-PERC modules does not require any additional steps in the cell fabricating process at the cell level, so that there is no extra cost incurred except some fine tuning of process control. 

While the cost of producing double-glass modules may remain the same regardless of the types of cells to be assembled with, making n-type bifacial modules needs several more major steps in its cell fabrication process as compared to that for p-type cells, inevitably resulting in some significant cost increase at the cell level. In addition, as the intensity of diffused and scattered light available to the back side of a string of tilt mounted modules is always about one order of magnitude weaker than that on the front side, a 10% discrepancy in bifaciality does not really make too much significant difference in yielding additional energy.

To date, JA Solar is actively working with a few selected metal paste suppliers to further refine the Al pastes for continuously improving the performance of bifacial PERC cells, which in turn, will further increase the listing power of Bi-PERC modules as well as the ability of yielding more additional energy from the backside of the modules. 

JA Solar firmly believes that Bi-PERC modules are a cost-effective solution for yielding additional energy therefore reducing the leveraged cost of energy (LCOE) for PV systems large or small, as it has been proven by the energy generation data collected from the fields where the modules are deployed.

This blog illustrates the advantages of bifacial PERC modules. Experiments show that Bi-PERC modules yield additional energy in comparison with the energy generation by regular mono-facial PERC modules. JA Solar has been actively working on innovative use of PERC technology and double-glass bifacial PERC modules. Its patented bifacial modules have currently achieved bifaciality of 70-75% in mass production, which will contribute to lower LCOE.

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Silicon Module Super League defines key metrics for PV ModuleTech 2017: Part 2

The second installment of our latest two-part blog on PV Tech, presenting the latest findings of the PV Tech in-house market research team, with all data and graphics shown in this blog coming from the August 2017 release of our PV Manufacturing & Technology Quarterly report.

The Silicon Module Super League (or SMSL) is comprised of seven companies that will each ship in excess of 4GW of modules this year, well above all other module suppliers to the industry.

Part one of the blog series covered the geographic shipment profile of the SMSL, the share of global module supply out to the end of 2018, and explained why the period from 2016 to 2018 is seeing almost all in-house cell lines being upgraded for higher performance cell production.

Part two here covers the upstream manufacturing capex from the SMSL, split out across polysilicon, ingot, wafer, cell and modules stages. It also covers blended global ASPs, cost of goods sold, and the blended gross processing margins that factor in both in-house and third-party outsourcing costs.

Leading companies from the SMSL will be presenting and discussing module supply at PV ModuleTech 2017, a must-attend meeting for all project developers, EPCs and asset owners/managers looking to see exactly what can be expected from the large-scale utility solar site additions coming online in the next 3-5 years.

Capex from the SMSL

The increase in manufacturing investments by the SMSL is shown clearly in the graphic below. The capex figures for each company are derived from backing out upstream (or manufacturing, or module-based) capex from overall capex figures that often include downstream project acquisition and build-out costs. We then analyse each company’s in-house capacity and/or upgrade/debottlenecking activities across each of the manufacturing value-chains in question (for most of the SMSL this includes ingot-to-module). Other contributions to manufacturing capex are added, such as maintenance and routine-tool-upgrade spending.

The net result, shown below, reveals one reason why this group of companies has become so dominant in module supply today. Capex has increased by more than 4X between 2013 and 2017, with 2018 levels (while preliminary for now) still showing healthy continued investments into upstream manufacturing.

In many ways, the growth trends and the value-chain allocations are indicative of the c-Si based industry as a whole, and in particular the p-type supply-chains.

Ingot and wafer capex is currently going through a major revival, due to the rush to add significant new capacity levels for ingot pullers and associated diamond-wire-saw (DWS) based wafer slicing tools. Multi also is now really starting to have an impact, in particular at the wafer stage, as many Chinese multi wafering companies seek to implement DWS technology in expectation of a surge in demand from cell makers that wish to alter front-end cell texturization.

While many companies have gone vocal about the whole multi DWS/black-silicon phenomenon, it may simply be that the success of Canadian Solar and GCL alone is going to determine whether this approach is real or not, and something that will be essential to simply to stay competitive from a multi wafer supply standpoint. Either way, capex allocation is guaranteed, and no complaints can be expected from the equipment supply-chain.

Spending on cell lines is shown to dominate the SMSL capex growth trajectory. This is directly a result of the factors that were covered in part one of the blog yesterday, and the need to keep in-house cell supply at reasonable levels (without being overly dependent on third-party cell makers in China and Taiwan), while also seeking to have best-in-class p-type mass production cell capacity installed across (mainly) PERC based cell types.

Cell spending has also been kept high, as the previous trend (that permeated across some of the SMSL and the wider industry in China as a whole) of acquiring distressed cell capacity from failed ventures would appear to be a thing of the past.

Tool throughputs, inspection and automation have all been radically improved on cell lines these days, with production lines typically being specified with throughputs north of 130MW, owing to a combination of single and multi-lane arrangements.

Add in here the current use of 5 busbars and PERC, and the cell line of 2010-2012 is essentially worthless in value, other than the bricks and mortar making up the four walls around it.
An interesting observation is that all our capex forecasts for the SMSL, and the industry as a whole, have been consistently upgraded in the past couple of years, and there is every chance that 2018 could see capex growth from the SMSL. Module sales pipelines and profitability however will be the ultimate judge of this.

Profitable module supply and living in the world of low-teen margins

Ask almost any GW scale module supplier from Asia back in 2012 if they would be happy with shipping >4GW of modules in 2017, with module gross processing margins in the low-teens (10-15%), and most would have bitten your hand off!

Of course, we know it is all about operational metrics, but with the SMSL (with the exception of GCL-SI and LONGi Solar) – and so many other midstream cell/module producers in the solar industry today – it is all about maximizing profits making and selling modules. Fail on that account, and your problems are indeed much bigger.

Having enjoyed gross margin levels above 20% for much of 2015 and the first half of 2016, on the back of ASPs in the 50-60c/W range, the climate for module ASPs changed on 1 July 2016, when first half 2016 China connection demand was temporarily turned off. This then led to nine months of rapid ASP declines until earlier this year. This is evident in the graphic below.

While still trending (globally) downwards, the speed at which ASPs are falling is somewhat under check for the SMSL, with only short-term polysilicon pricing being the difference in a few pennies plus/minus on COGS figures.

For many across Asia, and in particular China, Taiwan and much of Southeast Asia, returning low-teen gross margins, keeping operational margins in the black, and sustaining tens of thousands of jobs, is largely job-done from a business standpoint.

So long as working capital (or more accurately cash-flow) is sufficient to allow investments as and when the market demands, there is essentially no reason why all members of the SMSL cannot continue to lead the industry in terms of market-share and p-type product availability. The threat from new-entrants or domestic challengers (either seeking to be zero-to-hero n-type revolutionaries or merely copycat p-type followers) indeed becomes less relevant, as SMSL market-share levels move from 40% to 50% to 70% and higher. All-others are then left to carve a niche and adapt business operations as their served markets dictate.

However, getting tactics and strategies correct to be a long-term profitable multi-GW module supplier to the solar industry is far from a walk-in-the-park. Indeed, less than ten companies over the past 20 years have managed to get this right time and time again. The number is probably less than five, but certainly much less than all the companies that have at various times have hit the marketing-button to shout about being on somebody’s Tier-1 (or pseudo-bankable) listing where often the qualification criteria is somewhat removed from reality.

In fact, aside from current market-share levels of the SMSL – or the financial metrics being reported each quarter – their long-term success is only possible if they are actually delivering modules to the end-market that are reliable and can last more than 20 years, and often deployed in harsh and varying climates and conditions; and if warranties and guarantees on performance can truly be honoured, and material choice used in module assembly can be accurately tracked back with full traceability and repeatability.

In this respect, we start to move into real investor module-supplier choice criteria. While this has to varying levels always been an integral part of utility-scale solar farm design and component supply, the new technologies on offer from the SMSL are now complicating what was never an easy task.

Indeed, this issue has been a key driver behind us establishing the PV ModuleTech 2017 conference, and creating a credible platform to understand the issues that really matter for module-supplier and technology-choice across the tens – if not hundreds – of gigawatts of utility solar deployment that the SMSL may contribute over the coming decade.

The stakes could not be higher.

Learning more about the SMSL and industry supply trends

To access the underlying data and analysis of the SMSL that has been shown over the two blogs this week, including all manufacturers from polysilicon through to module production, the most recent version of our PV Manufacturing and Technology Quarterly report was released at the start of August 2017.

PV ModuleTech 2017 registration is open for the November event in Kuala Lumpur, Malaysia, with the topics and themes reviewed in the blog series set to be covered on stage by key companies making up the SMSL grouping.

A free webinar has been scheduled by PV-Tech on 30-31 August 2017, “PV Module Supply in 2017: Leading global suppliers, performance benchmarks & maximizing investor returns.” To register for one of the webinar times, please follow this link.

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Silicon Module Super League defines key metrics for PV ModuleTech 2017: Part 1

A key factor in the strong growth of the PV industry in 2017 is the Silicon Module Super League (or SMSL), comprised of the seven companies that will each ship in excess of 4GW of modules this year, well above all other module suppliers to the industry.

As we move into the final weeks of the third quarter of the year, it is highly informative to have a fresh look at the SMSL players, and collectively what changes are being made to ensure higher performance and increased quality of products to the market going forward.

This new two-part blog on PV-Tech presents the latest findings of the PV-Tech in-house market research team, with all data and graphics shown in this blog coming from the August 2017 release of our PV Manufacturing & Technology Quarterly report.

Module supply from the SMSL is setting the benchmarks for all PV module suppliers to the industry today, and offerings and plans from the SMSL are set to feature prominently at the PV ModuleTech 2017 conference, less than 3 months away (Kuala Lumpur, 7-8 November 2017).

Part one of the blog here presents data, graphics, analysis and commentary on the market-share of the SMSL and how this group of companies have been investing heavily in the past 12-18 months on improving in-house cell technology. Part two tomorrow looks in detail at investment and returns in manufacturing by the SMSL, including capex and production sales/cost metrics.

Module share accounted for by the SMSL in 2017

First, as a reminder, the SMSL is comprised of seven companies: Canadian Solar, GCL (Systems Integration), Hanwha Q-CELLS, JA Solar, JinkoSolar, LONGi Solar, and Trina Solar.

Six of the SMSL members are headquartered in China, with Hanwha Q-CELLS (Korean) having about one-third of its cell/module capacity based at the former Solarfun facilities in China. Critically, all of the SMSL has the potential to supply multi-GW levels of modules to the largest market in the world today, China.

As we noted in a two-part blog series last week, shipment levels of solar modules in 2017 appears to be well above 90GW, significantly higher than any of the market forecasts that other third-party market research firms have been giving for the past 12 months, at least. To understand this, please refer to part-one of the blog series last week on PV-Tech, through this link.

With five of the seven SMSL companies having strong global brand, established global sales and marketing distribution channels, and access to cell/module supply from Southeast Asia hubs, the geographic distribution of SMSL shipments is largely a summary of global end-market demand now.

The graphic below shows the collective geographic shipments of the SMSL, with our bottom-up forecast here extended to the end of 2018. Superimposed on the graphic also is the share of module shipments coming from the SMSL.

It could be argued that the SMSL is largely comprised of companies that have the scope to allocate considerable module supply volumes to China, as domestic end-market demand dictates, while also being able to access any other global market through a blend of in-house/third-party produced cells and modules, either made in China or Southeast Asia.

In fact, it is probably only possibly to have annual shipments at the company level above 4GW if this working arrangement is in place. Otherwise, being excluded from China (as an overseas-restricted producer), or having no (existing) tariff-free channels to the US and Europe, sets an upper limit on served addressable markets aligned with 1-2GW module supply volumes that defines the next major grouping of module suppliers to the industry now.

The graphic above captures this theme clearly, where the China segment over the time period shown is the leading driver of shipment growth. Module supply to the China market today is a far cry from some five years ago, when regional ASPs were on the low side, and technologies offered were below state-of-the-art module availability.

All this has changed now, and coupled with the relative low-risk and minimal supply volatility seen in other global markets, it is now regularly being prioritized by the SMSL on a seasonal basis. Domestic initiatives such as Top Runner clearly help the SMSL to prioritize technology, and this is reviewed later in this blog also.

However, perhaps the main takeaway from the first graphic here is that about half of all modules shipped by the solar industry in 2018 will be from one of the seven SMSL companies. If you are a global (or even regional or country-specific) project developer, EPC, installer, asset owner/manager or O&M provider, this simple fact should alone be sufficient to prompt further investigation into the performance, reliability and quality of all products being offered by the SMSL over the next few years.

In terms of what is actually made by the companies (in terms of cells and modules, assuming for now that wafer supply is more a commodity offering), almost 40% of the cells used in modules shipped by the SMSL during 2017/2018 will be made by third-party cell producers (other China, Taiwan, Korea, Southeast Asia originated) and about 20% of the modules will be re-branded from OEM-type contract supply (mostly China and Southeast Asia).

More on this at PV ModuleTech 2017, and potential implications on quality control related issues. Surely knowing where cells and modules are made, and by whom, is more important than the company name painted on the crate of modules supplied on-site?

SMSL embraces technology-change at rapid speed

If commentary on the SMSL was confined only to module shipment market-share today, it would alone be of value and one of the key leading indicators for industry growth potential.

However, perhaps the most surprising aspect of the past 12-18 months has been technology-upgrades by the SMSL, and the shift from being first-and-foremost low-cost centres of the industry to technology-drivers (and in some case technology-innovators).

It should be noted that several members of the SMSL (Canadian Solar, JinkoSolar, Trina Solar) started off as low-cost module assembly companies in China, before moving upstream (mainly to cell production) but remaining true to low-cost/low-risk from a technology perspective.

The two new members of the SMSL (GCL-SI and LONGi Solar) are relative newcomers to cell manufacturing having made their mark in the industry as poly/wafer dominant suppliers.

Therefore, the pace of change in cell technology and in-house capacities is all the more impressive. This is shown clearly in the graphic below that tracks in-house cell effective annualized cell capacity levels from the SMSL.

Up until 2016, the in-house cell production from the SMSL was mostly based on standard p-type multi cells, but this can be seen to change radically over the period 2016 to 2018. Several factors are driving this:

Companies such as Canadian Solar, JA Solar and Jinko Solar have been increasing the portion of mono cell capacity in-house, and upgrading this to PERC. Additionally, lines previously run as multi have been upgraded directly to mono/PERC.
LONGi Solar’s entry to the SMSL has overlapped with the company’s strong midstream capacity expansions, all based on p-type mono and with upgrades ongoing to have full p-mono PERC capability.
Hanwha Q-CELLS has reorganized its technologies specific to facilities in China, Malaysia and Korea, with only the China facilities pending any meaningful technology upgrades now.
More generally, one can segment the technology roadmaps of the SMSL based on several discrete choices:
Adding new p-type mono cell capacity specified from the start as PERC capable, or moving existing p-type mono or multi lines to p-mono PERC.
Retaining a portion of p-type multi configured to use diamond-wire-saw (DWS) cut multi wafers, or in the case of some SMSL companies, adding new p-multi lines matched to ingot/wafer capacity for DWS multi wafer supply.
Having p-multi capacity optimised for p-multi PERC production.

The segmentation here can be linked to the graphic above for 2018, where the in-house cell production of the SMSL is effectively transitioned to ‘advanced’ p-type cell designs. In the case of multi this is either p-multi PERC or cell lines modified to be capable of using DWS multi wafers (the so-called ‘black-silicon’ cell categorization). For mono, this is all PERC based.

By 2019, it is likely that the terms standard and advanced cell types will become somewhat irrelevant, with the standard p-type cell having passivated front and rear surfaces.

While it remains to be seen if the DWS-multi/black-silicon phase is a means-to-an-end to extend the life of p-multi by a year or so, the rapid move to PERC is pretty much a game-changer for much of the industry.

The use of rear passivation layers effectively unlocks standard (full-Al BSF) cells from a somewhat limited upgrade path, that was previously one of the reasons many cell makers (mostly from China) had so often presented marketing plans that were based on moving cell lines (rather miraculously) from standard p-multi to hybrid HJT/IBC (albeit confined to an efficiency lines on a PowerPoint slide at a trade show).

Actually, it may be that using passivation layers on the rear surface will be remembered in 3-5 years as the impetus for mass-produced bifacial and glass/glass modules, while at the same time putting a halt on the one-extra-front-busbar-per-year upgrades that have dominated module line technology advances in the past few years.

2017 is still a PERC-migration year, as much as it is a mono market-share-gain year; and this is probably what 2018 will look like also, as far as GW-scale manufacturing is concerned. 
Getting mono-PERC reliable and truly LID-free (to name just one of the many long-term field related metrics that matter to investors) does not happen overnight, and simply doing the manufacturing line upgrades with new deposition and contact opening tooling is merely the first step in PERC only.

Taking 2017/2018 as the PERC optimization years, then 2019-2020 may well be the bifacial/glass-glass period, with p-type module site yields moving closer to levels previously considered the sole domain of n-type supply. This timeline may also start to see the move to multi-wire front grid formation, and smart interconnecting at the cell level, and possibly the judgement will be made on half-cut or singulated cell designs and whether the additional complexity/engineering required is good value for money.

Ultimately however, if the SMSL is commanding market-share levels of 70% by 2019-2020, then the main technologies that matters will be what the multi-GW module supply from this grouping looks like. The overall envelope of module performance and field-driven quality and reliability data from the SMSL will then set the competitive benchmark for other me-too c-Si p-type producers, or specialized n-type or thin-film based module suppliers.

Learning more about the SMSL and industry supply trends

Part two of this blog series will appear on PV-Tech tomorrow, showing the capital investments and blended module processing margin trends of the SMSL.

To access the underlying data and analysis of the SMSL, including all manufacturers from polysilicon through to module production, the most recent version of our PV Manufacturing and Technology Quarterly report was released at the start of August 2017, and subscription details are available here.

Leading companies from the SMSL will be presenting and discussing module supply at PV ModuleTech 2017. The event is likely to be a must-attend meeting for all project developers, EPCs and asset owners/managers looking to see exactly what can be expected from the large-scale utility solar site additions coming online in the next 3-5 years, most of which will be using modules supplied by the SMSL companies.

Lastly, I will be delivering a free webinar on 30-31 August 2017, “PV Module Supply in 2017: Leading global suppliers, performance benchmarks & maximizing investor returns.” To register for one of the webinar times, please follow this link.
 

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