Thursday, January 8, 2009

Solar: "Photovoltaics: 7 Trends to Watch in 2009"

From Gunther Portfolio:

As promised in Top 10 GUNTHER Portfolio Posts of 2008, it’s time to cover 2009 trends and predictions while scoring my 2008 predictions from Photovoltaics: 2007 Post Review and 2008 Trends to Watch – Part 2.

Photovoltaic Market Demand Growth (new for 2009)

Although Solar Market Eclipse Coming in 2009, iSuppli Warns:

Bringing an end to eight consecutive years of growth, global revenue for Photovoltaic (PV), panels is expected to plunge by nearly 20 percent in 2009, as a massive oversupply causes prices to drop, according to iSuppli Corp.

The plunge in revenue will come despite an 9.6 percent rise in Gigawatt (GW) installations of solar panels in 2009, growing to 4.2GW for the year, up from 3.8GW in 2008.

I find it too easy to join the pessimism about Photovoltaic (PV) Industry growth in 2009. Going contrarian, my rosy nominal forecast for 2009 is 45% growth in PV module demand on a GigaWatt-peak (GWp) basis while 20% to 30% lower PV module pricing limits revenue growth to only 20% or 10% respectively.

This forecast is contingent upon normalization of credit markets by Spring 2009 with adequate financing available for large photovoltaic projects at attractive interest rates. Renewed PV market growth in Japan and the United States along with strong new PV market growth in Italy and Greece are required to achieve this forecast. Perhaps the Chinese government will fund large PV projects to stimulate production by domestic PV manufacturers?

Polysilicon and solar grade silicon outlook

Last year, my heading was Polysilicon and solar grade silicon shortages persist, and I said: This silicon shortage seems set to continue until at least 2010 regardless of the self serving predictions of certain Solar CEOs.
Grade: Fail

Towards the end of 2008, “Poly-Si spot prices fall to US$150-175/kg, say Taiwan makers” by Nuying Huang and Adam Hwang for DIGITIMES. It now looks as though polysilicon supply will be in balance to oversupply in 2009. The polysilicon supply situation is tempered by the financial crisis which will cause silicon start-ups to fail, slow planned capital expansions, or delay production reinforcing REC Silicon’s view that one-quarter (25%) or less of all announced, planned, and rumored polysilicon capacity expansions by new entrants (Tier 2 and Tier 3) will succeed by 2012 (please see REC Group Capital Markets Day 2008). However, if global semiconductor demand declines by 25% in 2009 per “Top 20 predictions for semis in 2009” by Mark LaPedus at, will excess polysilicon be redirected to solar? What will happen if polysilicon spot prices dip below long term contract pricing? Will this trigger automatic price adjustments or demands for contract renegotiations?

Thin Film Photovoltaics

At the start of 2008, First Solar is the king of the hill in thin films and photovoltaics with the lowest variable production cost per Watt in the industry....MORE