With overcapacity of 82%, companies need innovative tools to differentiate from cheaper Chinese rivals, says Lux Research.
BOSTON, MA – October 25, 2012 – Reeling from a glut of production capacity, makers of solar panels need to acquire innovative production equipment in order to cut costs, increase margins, and offer differentiated products, according to Lux Research.
This year, global capacity utilization is at 55% for crystalline silicon (x-Si) module production, 70% for cadmium telluride (CdTe) and 80% for copper indium gallium (di) selenide (CIGS). Consequently, cell and module manufacturers are turning to core product differentiation to revamp margins and fend off low-cost Chinese competition.
“Across the industry there is recognition that innovation is needed to survive a shakeout,” said Fatima Toor, Lux Research Analyst and the lead author of the report titled, “Turning Lemons into Lemonade: Opportunities in the Turbulent Photovoltaic Equipment Market.” “Equipment suppliers have a vital role to play in enabling that innovation.”
Lux Research analysts examined the PV production equipment landscape to identify opportunities for innovation. Among their findings:
- There’s opportunity in reducing silicon costs. Current wafer sawing techniques waste silicon; in contrast, technologies, such as direct solidification and epitaxial silicon eliminate the need for wafer sawing. Emerging quasi-monocrystalline silicon (qc-Si) ingot growth enables 40% cheaper c-Si wafers.
- In CIGS, standardization is key. CIGS thin-film PV relies on custom equipment today. However, off-the-shelf tools and improved throughput will drive higher efficiencies, performance and yield – lowering capex and helping manufacturers attain scale and competitive production costs.
- New cell designs lead to equipment upgrades. Emerging cell designs, such as selective emitter (SE) and heterojunction with intrinsic thin layer (HIT) present potential for high efficiencies. However, they require new tools, and as a result, 60% to 70% of new equipment sales are for the cell production equipment.
The report, titled “Turning Lemons into Lemonade: Opportunities in the Turbulent Photovoltaic Equipment Market,” is part of the Lux Research Solar Components Intelligence service.