Finlay Colville, senior analyst, Solarbuzz, discusses crystalline silicon (c-Si) producers in China, where capacity expansions could lead to a market flush with low-cost solar panels through 2011. What's the long-term expectation?
Leading c-Si producers in China are investing heavily in new capacities along the value chain as part of their long-term strategic positioning. However, the near-term impact is likely to be strong bookings for preferred equipment suppliers and a potential oversupply of low-cost solar panels during the second half of 2011.
During 2009 and 2010, tier 1 photovoltaic (PV) producers embarked on strong rates of PV capacity expansion, with annual growth rates exceeding 50%. The majority of the equipment installed for this represented c-Si capacity added at low cost, located within China and Taiwan. While originally motivated by reaching capacities at specific stages along the c-Si value chain at the 1GW level, 2011 is now poised to see this extended to 2GW.
For some, vertical integration at the 2GW level is a must-have attribute. For others, such as pure-play solar cell makers in Taiwan or poly/wafer producers, the strategic focus remains on long-term contracts and OEM supply agreements within the value chain.