Tuesday 20 November 2012

The future of Taiwan solar: Will recent gains continue?

His argument rests ironically on one of the biggest issues facing the global solar industry — the decline of subsidies and feed-in tariffs (FITs) in Europe. Generous FITs in much of Europe, especially Germany, Spain and Italy were the lifeblood for solar for many years, but lingering economic malaise has led to major reductions.

Lin feels that reduced FITs will actually push installers to seek out higher performance modules capable of generating 250 watts over the current 235-watt norm. “To get a better investment return you need to install a high-efficiency module,” he observes.
A high efficiency module requires cells made from high efficiency wafers, and already he says GET has seen an uptick in order for its high efficiency wafers, which now account for 70% of the company’s market and which GET hopes will comprise 80% by December.
With the market shifting to higher performance modules, he suggests that wafer capacity will need to be shut down, as most wafer makers “cannot produce high efficiency wafers.”
This could stand the current market environment on its head; instead of rampant overcapacity, he forecasts shortages of high-performance wafers.
The key to his assessment is the advancement in multi wafers that put them on competitive footing with more costly mono wafers. P-type mono wafers are capable of 19% conversion efficiency, but Lin says that investments in casting and slicing technologies will lift GET’s wafers to 18% conversion efficiency — at a much lower price.
The price for multi wafers stood at US$0.82 per kg as of Nov. 19th, compared to US$1.12 for mono, according to PV Insight. Lin says that GET’s high performance wafers sell for a 5-10% premium over other multi wafers, but still below the cost of mono. Also, unlike mono, the purity of silicon used during manufacturing isn’t a factor in multi wafers, further reducing costs.
A shortage of high performance multi wafers wouldn’t be easily rectified. Says Lin, “even if you can purchase the same machines you can’t necessarily achieve the high efficiency products.” He contrasts wafer making to cells, saying that unlike the relatively low-tech cell industry, wafer making requires more skill and “know-how,” which gives the advantage to more sophisticated players.
“Once the market transfers to high efficiency modules, then wafers will become key,” says Lin.
Luke Lu, senior sales manager for marketing and sales with Big Sun Energy Technology, Inc., a Taiwanese specialty cell maker, says that high performance has also been the key to his firm’s success in gaining access to the Japanese market. Lu notes that Japan’s attractive FITs and progressive legislation prompted by the Fukushima nuclear meltdown mean that Japan has the social and political will to invest in solar energy. And as one of the wealthiest societies in the world, it also has the financial resources, both of which mean that the nation is increasingly becoming the center of the solar world.

But gaining access to Japan’s market is not easy, and many Taiwanese cell makers complain bitterly that Japan’s stringent requirements and onerous regulatory system conspire to keep non-Japanese firms from competing in the market. Big Sun, however, actually has the necessary certification to sell on the Japan market. Luke Lu notes the process took two years of testing, but was worth it as Japan has risen to become 45% of their business. He says the company offers customized orders to customers through a local Japanese agent, and 70% of their global monthly sales are in higher-margin, higher-performance mono cells.
As a boutique player, Big Sun only has 150 MW of capacity, but Luke Lu says revenues rose 25% month-over-month, with September earnings at NT$120 million rising to NT$152 million in October.  Unlike other cell makers, he says Big Sun’s EU shipments actually increased by 50%, but attributes this to a one time spot order. 
Herbert Lu, deputy director of worldwide sales and marketing for Neo Solar Power Corporation (NSP), Taiwan’s second largest cell maker by revenue, sees optimism not in wafer technology but in the sinking price for polysilicon. At the current price of US$15.99 per kg as of Nov. 19th, according to PV Insight, many of the world’s polysilicon makers such as GCL-Poly are operating below manufacturing cash-costs. He speculates that polysilicon makers will need to eventually take capacity offline, leading to greater capacity rationalization — and more sustainable pricing — throughout the solar industry supply chain.
Others see the rise in demand from the US, Japan and China markets as already leading to price stability in cells and wafers. Maxim Research’s clean tech analyst Aaron Chew expects a 9% decline for wafers and an 8% decline for cells month-over-month for October, but many industry players see the price dynamic starting to stabilize. Higher demand is balancing out capacity, according to many, leading to more stable — if still very low — prices.

http://www.renewableenergyworld.com/rea/news/article/2012/11/the-future-of-taiwan-solar-will-recent-gains-continue

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