All change in the PV industry

07-Nov-12

The photovoltaic industry grew at 70% pa 2006-2011 and further fast growth is expected. In 2011 polymer usage in photovoltaic (PV) module manufacture exceeded US$ 2 bln, as per Applied Market Information Ltd (AMI Consulting). Increasing availability of renewable energy is a key political objective in many countries. Politicians have a variety of motives for their support ranging from meeting green targets, positioning themselves in favour of green initiatives, creating jobs, seeing PV production as a core part of a modern economy. Other key political objectives are securing a sensible energy mix and ensuring sufficient generating capacity. Although government financial support is being scaled back by Western cash-strapped governments, there is still sufficient political support globally to ensure the industry continues to grow quickly. Costs of PV production have fallen dramatically driven by new technology and oversupply at key parts of the supply chain. AMI Consulting estimates that PV module prices have fallen by around 50% in the last 18 months. The key polymers used in PV production are fluoropolymers, polyesters and EVA. Key polymer suppliers include Arkema, DuPont, ExxonMobil and Solvay. A large number of other polymer producers are pushing growth strategies such as Dow, Evonik and Solutia. Profitability has proved to be very unstable and consequently the industry is restructuring rapidly and new business models are emerging. Recent examples of restructuring include BP closing down its solar business in 2012, Abound Solar filing for bankruptcy in July 2012 despite having raised US$260 million in equity in the last three years and Q Cells being acquired by Hanwha in October 2012. A global industry has emerged with a high level of imports and trade patterns which are changing rapidly. A large scale shift has occurred in which the Chinese share of global module manufacture increased to more than 50% in 2011. As a response competition authorities are imposing antidumping duties. Having seen a fourfold increase in imports from China 2009-2011, the US Department of Commerce in October 2012 recommended antidumping duties on Chinese importers of PV cells and modules ranging from 18% to 250%. The European Commission (EC) started to investigate similar issues in September 2012 and it is likely that the Indian competition authorities too will take action soon.