Tag Archives: Trina Solar

Nanosolar’s progress – or lack thereof – revealed at 4th Thin Film Summit USA

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In early December, we attended the Fourth Thin Film Summit USA in San Francisco, where we heard an interesting company presentation from Brian Stone at Nanosolar – a noteworthy venture-backed copper indium gallium diselenide (CIGS) module producer. After raising nearly $400 million prior to 2009, the company has remained largely quiet for the past year. Lux last profiled* Nanosolar in late 2009.

Brian presented Nanosolar’s utility panels – an application-specific product, not unlike the utility panels offered by First Solar and crystalline silicon (x-Si) incumbents like Trina Solar. The panels, he said, delivered 11% efficiency, with a roadmap to 16% by 2015. He also highlighted a few pilot projects at Nanosolar, including plans for 8 MW to 10 MW of production in early 2012.

Brian also shed some light on the company’s cost structure, citing $0.65/W to $0.70/W for materials today, decreasing to $0.30/W to $0.35/W – however, we still believe that nanoink costs remain a major bottleneck* for the company. At 2.5 GW annual capacity, Nanosolar anticipates total module costs of $0.40/W to $0.45/W. Today, he cited total production costs between $1.10/W and $1.20/W. Lastly, Brian highlighted balance of systems savings in the company’s pilot projects, citing $0.10/W to $0.15/W savings by using Nanosolar panels.

Despite its ambitious roadmap to low production costs, we think Nanosolar’s lack of competitiveness today will prohibit it from reaching its goals.

It is targeting utility-scale projects, but an 11% efficient panel won’t allow it to compete with cadmium telluride (CdTe) leader First Solar, which can also develop utility-scale projects internally. Even amorphous silicon (a-Si) can prove competitive against an 11% efficient CIGS panel, depending on location. On the other hand, CIGS is gaining traction in commercial rooftop applications, which are less space-constrained than residential rooftops.

In general, it’s clear that Nanosolar could very well be a victim of the solar shakeout in 2012 without additional investment. The company is simply not keeping up with the leaders in the CIGS market, like Stion and Solibro – both of which are above 13% production efficiency – and capacity leader Solar Frontier. That competitive landscape, in addition to bolstered competition from x-Si and CdTe, place Nanosolar squarely on the outside looking in.

* Client registration required.

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Falling panel prices and Chinese competition creating solar woes

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The precipitous fall of module prices has led to a few casualties in solar. Evergreen Solar filed for Chapter 11 bankruptcy, and is currently trying to sell its assets and core “String Ribbon Technology.” With falling polysilicon prices (currently between $55/kg and $60/kg), the company couldn’t compete with standard crystalline silicon technology which, as we’ve mentioned previously*, has been made substantially cheaper by Chinese manufacturing firms. Chinese manufacturers have enjoyed continuing support from the Chinese government through inexpensive capital, low prices for electricity, and low labor costs. This is clear evidence that government subsidies and support are extremely critical to the growth of the solar industry.

Meanwhile, Solon announced that it has decided to shut down its Tucson facility given its inability to be cost competitive with the low-cost Chinese module manufacturers and instead focus on its project development and power plant business.

In addition, high-cost American sweetheart Solyndra was forced to shut its doors and file for bankruptcy. The start-up attracted high scrutiny for its inability to compete due to significant price drops in polysilicon, even after receiving a loan guarantee from the U.S. government. And Ascent Solar*, a thin-film CIGS manufacturer that was likely heading the Evergreen route was rescued by TFG Radiant Group of China, by signing a royalty and strategic partnership agreement.

Non-cost-competitive technologies and companies with poor strategy and balance sheets will likely go out of business faster given the shift in demand dynamics worldwide for PV that have significantly impacted module prices. This news bodes well for all the low-cost Chinese manufacturers such as Yingli, Trina Solar, and Suntech, all of which are better able to withstand the low-price environment. This news should make smaller thin-film solar companies wary of the competition in the industry.

* Client registration required.

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GCL moves aggressively into U.S. project development space with top-tier tax equity partner

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In a major coup, GCL Solar Energy signed a deal this week with Wells Fargo, which will provide more than $100 million of tax equity to GCL-sponsored projects by the end of 2011 – which we estimate is equivalent to roughly 40 MW to 50 MW of new installations.

A quickly emerging Chinese solar company, GCL Solar Energy is a subsidiary of GCL Poly Energy Holdings, which produces polysilicon ingots and wafers. The firm’s latest development is important in a number of respects. First, the transaction breaks the mold cast by Yingli, Trina, and other integrated Chinese manufacturers by putting GCL into the project development space. These other companies are integrated from ingot to module, and they hesitate to enter the U.S. project space for fear of competing with their customers. Further, one firm that took the leap – Suntech Power through its subsidiary Gemini Solar – failed dramatically due to its poor understanding of the U.S. regulatory environment.

Secondly, GCL’s move effectively duplicates the value chain model established by MEMC’s acquisition of SunEdison, giving GCL presence in the two parts of the value chain with the most pricing leverage, poly to wafer and project development. This enables the company to subjugate device manufacturers, especially those without access to their own polysilicon or end markets, into low-margin tolling arrangements.

Lastly, it puts Chinese project developers directly in competition with U.S.-owned project developers for limited tax equity financing. This is especially critical at this juncture, given the possibility that the U.S. ITC grant will expire at the end of 2010 – and the market is moving into “zero sum game” territory, where any tax equity agreement subtracts from the appetitive available to keep other project developers active.

Those watching the U.S. solar market closely should prepare for protectionist cries against Chinese companies, magnified by the fact that GCL Solar is partially (and explicitly) owned by the China Investment Corporation, China’s sovereign wealth fund (see the December 10, 2009 LRSJ – client registration required). Though this move solidifies GCL as a leader in the solar space – and it could do quite well for itself in the U.S. in 2011 – we are concerned about the potential for political fallout as the strength of China’s energy policies takes advantage of the paucity of similar policies in the U.S.

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Lux Q2 2010 Solar Supply Tracker: Growing demand stretches upstream supply

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Last week, Lux Research released its Q2 2010 Solar Supply Tracker (client registration required), which updates our figures on production and capacity throughout the value chain through 2013. Regular readers of the Tracker will find the most important update since Q1 is in the recent version’s demand forecast, which has been increased to 15 GW of market demand in 2010, driven by a surge in Germany and Italy ahead of 2011 feed-in-tariff reductions. We discussed this following PVSEC in Valencia a few weeks ago (see the September 16, 2010 LRSJ – client registration required).

On the supply side, Tier 1 and 2 module manufacturers are poised to produce 14.8 GW in 2010. Figuring in Tier 3 players for the “high case” scenario shows a potential for 18.0 GW of production in 2010. However, even with this greater-than-expected demand, Tier 1 and 2 module manufacturers maintain oversupply with 20 GW of capacity.

In Q2, crystalline silicon (x-Si) increased its technology dominance, reaching 79% of module production. Thin-film silicon (TF-Si), led by large manufacturers like Sharp and Bosch, and cadmium telluride (CdTe), dominated by First Solar, each account for about 9% of total production. Together, these three technologies make up nearly the whole module market. Copper indium gallium diselenide (CIGS) modules are still being produced in small quantities, but will quickly grow more than 1 GW if Solibro, Miasolé, and Solar Frontier execute plans for large capacity expansions over the next several quarters.

Geographically, Asia increased its dominance in module manufacturing, accounting for 75% of production in Q2 as more European capacity became unviable and low-cost Asian manufacturers like Trina, Yingli, and LDK added capacity in the downturn. On the polysilicon front, Wacker added European capacity, increasing the EU’s production share to 20% from 17% the previous quarter. However, Asia still holds the largest share at 43%.

A number of key market shifts occurred in Q2 throughout the value chain. Chinese polysilicon producers were a mixed bag as several low-cost manufacturers, including Jiangsu Shunda and Sichuan Xinguang, shut down for retooling or recapitalization while new entrants Yongxiang and Fine Silicon (owned by Yingli Green Energy) were still ramping production. Meanwhile, demand in 2010 will reach 100,000 MT and exceed the 75,000 MT production of the six top polysilicon producers – Hemlock, Wacker, GCL, OCI, REC, and MEMC – providing room for new entrants like Daqo New Energy. Further downstream, wafer supply is increasingly constrained in the face of strong demand and will hit 78% capacity utilization in Q3. Low-cost Asian manufacturers continue to dominate this segment, with GCL Silicon, Kyocera, and Green Energy Technology moving into the top 11. Strong demand has spurred several companies to make aggressive expansions in cell and module production. JA Solar led the charge in cell production, rising into the top 3 in Q2 and positioning itself to overtake the entire field by capacity in Q3. It has also integrated downstream into module production, along with China Sunergy, through acquisitions. Although these companies are emerging as new leaders, the top five module manufacturers remained unchanged from Q1, with the exception of Suntech Power, which overtook First Solar at the top spot in Q2 with 1.4 GW of capacity.

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Lux’s Q1 2010 Solar Supply Tracker sees growing production amidst slight oversupply

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Last month, we released the Q1 2010 version of the Lux Research Solar Supply Tracker (see Solar Supply Tracker, Q1 2010 – client registration required). It includes figures on production and capacity data throughout the value chain through 2013.

Notably, the Tracker revealed that total module production for 2010 will be 12.6 GW, an increase of about 4.7 GW from 2009 production. We’ve also updated the Lux Research demand forecast, which predicts 12.1 GW of market demand in 2010, signifying a slight oversupply this year.

Crystalline silicon (x-Si) will account for 76% of total new module production in 2010. Most of the remaining share will be split between inorganic thin-film PV – particularly thin-film silicon (TF-Si) fueled by a slew of entrants – and cadmium telluride (CdTe), overwhelmingly provided by First Solar. Each will each account for 11% of 2010 module production. Companies like Avancis, Würth Solar, and Solibro will each produce a handful of Copper indium gallium diselenide (CIGS) modules in 2010, to round out the balance of new module production.

In terms of geography, Asia continues to dominate the manufacturing scene, accounting for 45% of polysilicon production, 78% of wafer production, and 71% of module production in 2010. Though Asia dominates in absolute production, several companies are adding capacity in North America, hoping to capitalize on promising demand in the U.S. and Canada, including Canadian Solar, SunPower, and Yingli.

A number of companies made notable changes to production and plans in Q1. Upgraded metallurgical silicon (UMG-Si) producers Dow Corning and Timminco stopped production at their Brazilian and Canadian facilities, respectively. Both companies cited decreased market demand, and will leave capacity idle with plans to reevaluate demand in a few years.

While UMG-Si players are hurting, top-tier polysilicon suppliers are thriving. The top six polysilicon producers – Hemlock, Wacker, GCL, OCI, REC, and MEMC – will supply 75% of the total polysilicon to the market in 2010. Further downstream, several companies beat expectations and are accelerating ramp schedules. Taiwanese wafer player Green Energy Technology, cellmaker Neo Solar Power, and Chinese module manufacturer Solarfun all increased or accelerated capacity addition plans, citing increasing customer demand. Although Solarfun garnered more market share with its increasing capacity, it could not crack the top five module manufacturers. First Solar remained in the top spot, followed by Suntech Power, Sharp, Canadian Solar, and Trina Solar.

Looking out several years, supply remains slightly above demand throughout the value chain – except at polysilicon, where a significant supply overhang remains. As we witnessed this quarter, this supply overhang forced more expensive producers to shut down production lines, as their processes are no longer economically viable. Expect more consolidation and additional polysilicon players shutting down production facilities, as well as significant shuffling of market share as new technologies gain  traction, the vertical integration trend continues, and delayed subsidy cuts in Europe keep demand high.

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Rating x-Si module makers on the Lux Innovation Grid

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lig-c-siCrystalline silicon (x-Si) PV modules comprise the largest and most established portion of the photovoltaic (PV) module market, holding roughly 81% of the global PV market in 2008. These x-Si modules also have significant penetration in all sizes of grid-tied applications – from residential to large-scale utility installations.

A handful of large, top-tier manufacturers dominate the market, but smaller start-ups with differentiated technologies are still entering. As the module oversupply rolls through 2009 and 2010, some crystalline silicon module manufacturers will be at the heart of the shakeout.

Examining the performance of companies in this technology area, we find that:

  • Large corporations with differentiated technologies are among the strongest performers.Many of the highest ranking companies are large corporations that stand out due to top-level high-efficiency products and large corporate backing. Their backing provides support for module warranties, capacity expansions, pricing battles, and technology development.
  • New competition from low-cost manufacturers is driving down the value of European leaders. European module manufacturers with high-quality x-Si module technologies are beginning to struggle as module production becomes increasingly commoditized. Their quality advantage is beginning to slide as new low-cost manufacturers gain access to higher-quality materials, dropping their scores on technical value scale.
  • Even with promising technologies, start-ups face formidable barriers to growth. The most successful pure-play solar firms got an early start in the market, and offer either differentiated technologies, sharp business execution, or both. New entrants to the solar market need more than a novel design or slight technical advantage to succeed. Companies building capacity, especially those based on a novel technology, score lower than those with existing capacity because they must play catch-up with more traditional and established manufacturers. The outlook is increasingly bleak for start-ups with unique technologies that are yet to build production capacity.
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