Photovoltaic manufacturers feel the pinch of growing pains

Mountain View, Calif.

Worldwide shipments of solar photovoltaic (PV) cells and modules surged by 52 percent in 2002, a new report from Strategies Unlimited reveals.

According to the report “Photovoltaic Manufacturer Shipments & Profiles, 2001-2003,” 2002 marks the fourth consecutive year of PV shipments growth in excess of 30 percent. Shipments are expected to exceed 30 percent again in 2003, Strategies Unlimited estimates.

While most industries would envy this performance, such growth comes at a price. “PV manufacturers are scrambling to add manufacturing lines and build new plants to meet demand,” noted Neil Dunay, senior analyst at Strategies Unlimited. “This effort requires extraordinary capital investment.”

To keep up with demand, global PV manufacturing capacity will rise 35 percent in 2003 to more than one GW peak (1,000 MWp). At least eight manufacturers have already detailed factory expansion plans for 2004.

Yet, revenues are not growing nearly as fast because prices are falling dramatically. Average cell and module prices fell 14 percent in 2002 to $2.91 per watt peak (Wp). The price declines result not only from improved manufacturing efficiencies but also from intensifying competition among global suppliers.

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The most notable competition is coming from Japanese manufacturers. With a strong Japanese domestic support program for rooftop PV systems, shipments by Japanese manufacturers jumped 88 percent in 2002 and accounted for nearly half of the global market. Sharp Corp. of Japan emerged as (by far) the largest PV manufacturer in 2002, accounting for 21 percent of global PV shipments. Several major Japanese manufacturers have outlined plans for increasing market presence in the United States and Europe.

Strategies Unlimited is a market research and management consulting firm that specializes in emerging compound semiconductor component technologies. Like EL&P, Strategies Unlimited is part of the PennWell family of companies. For more information contact Dunay, senior analyst, at 401-243-8116 or ndunay@strategies-u.com.

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