China's solar PV industry entered into cold winter suddently from hot summer.
Many Chinese solar wafer, solar cell and solar panel manufacturers, including the major PV manufacturers, like Suntech Power, have stopped the production or reduced the production since the product prices are coming down too fast, and there is no margin for them to produce the products at all.
Some source told me that the solar cell production was cut half, and the solar panel production was 30% off at Suntech Power.
When the product price become stable, many manufacturers will recover their productions, and others will get out of the business.
Some companies believe this is a good opportunity for them to kick their competitors out of the market and in future they will have great perspective since the product cost will be reduced to acceptable level and the market demand will be much greater.
Showing posts with label PV industry. Show all posts
Showing posts with label PV industry. Show all posts
Monday, November 3, 2008
Saturday, November 1, 2008
Second wave of major new Chinese module manufacturers coming in 2009
Current financial crisis could speed up consolidation in PV industry
By: Edwin Koot (CEO solarplaza)
31 October 2008 - The global solar energy market in 2008 is expected to grow by 50% compared to 2007. The Chinese solar PV industry is growing rapidly and will soon be the biggest producer of solar cells and modules in the world. There are now over 100 Chinese solar module manufacturers, and even more new market players are expected in the short term. The question is: what might the current credit crisis and pessimistic economic forecasts mean for the PV market and industry in 2009? With solar modules becoming a commodity product, China will definitely be playing a key role as a major producer of solar cells and modules. However, if we look at the maturity of the PV industry right now, and what has happened in other industries, an imminent consolidation phase seems likely. That could mean that fewer producers, and only the bigger ones among them, will survive. So which companies are likely to be the winners, and be reliable business partners for the long term?
Global PV market developments
The PV market is likely to grow less rapidly in 2009. First of all, the world's biggest market in 2008 - Spain - has reduced its support for solar energy. Feed-in tariffs will be cut by 30% in 2009 and, even more significantly, only 500 MWp of new installed PV power will be eligible for this feed-in tariff. This could lead to a decrease in volume for the Spanish market of more than 60%. With feed-in tariffs going down by around 10% in the German PV market, which was the world's biggest PV market for many years, it is likely to grow, but at a moderate rate. Growth in other markets is also dependent on government support programs. And although the US government recently agreed on an eight-year extension of the federal tax credit scheme for solar energy, the US market is not likely to grow very rapidly. The current credit crisis, and the economic recession forecasted for 2009, will limit the available finance from banks, and therefore also limit the development of new PV projects.
On the supply side, along with the global PV industry as a whole, supply will grow even faster than market demand in 2009. A conservative forecast by the Prometheus Institute suggests that solar module production volume will grow by a massive 80% in 2009. Most of the investments in new production capacity were planned between late 2007 and 2008, under the highly profitable market conditions.
Consolidation phase
Last September, SolarPlaza held the second Global PV Demand Conference in Valencia, Spain. The conclusion was that the huge growth in solar module production over the next two years, compared with the ?modest? growth in demand, would lead to an oversupply situation commencing in 2009. The experts in attendance predicted that this would create a consolidation phase in the PV industry. This conclusion was drawn even before the international credit crisis began. The difficulty in obtaining finance for new solar energy systems is now visible in the European PV markets. Even worse is the situation in the USA. Not only is the credit market frozen, the country is also facing economic recession in 2009 and possibly even 2010. Under these conditions, with the oil price falling and with no bank to finance PV system investments, customers might think twice about spending their savings on solar energy. Therefore, the credit and economic crisis may prevent rapid growth in both the US and the global PV markets. Together with the inevitable oversupply situation already predicted for 2009, the solar PV industry could be facing very hard times over the next two years. For the longer term, market forecasts are extremely positive. Industry consolidation will bring module prices down further. And, within a few years, one solar kilowatt hour will equal the price of electricity from the grid (?grid parity?) in the world's sunny regions. This will unleash unlimited market potential.
As a result, for the short term, financially weaker solar cell and module manufacturers, and those without a foothold in the world's key PV markets, will be put out of business or driven into the hands of some larger partner. In other words, the global economic crisis will speed up the consolidation phase in the PV industry.
Who will be the winners?
The world's leading manufacturers in the solar industry are well placed for continued growth in 2009. The top 10 of the world's biggest solar module manufacturers includes several Chinese companies, like Suntech Power, Yingli Solar and Trina Solar. These companies started up during the first wave of new Chinese PV industries a few years ago, and all three of them are listed on the New York Stock Exchange. They have grown rapidly and made healthy profits in 2007 and 2008. Their track record will help them to remain on the shortlist of banks financing PV projects. Their full order books will help them through a more difficult market phase in 2009. However, there are dozens of other manufacturers out there on the market. Many of them are relatively small, or just started trading in 2007, following the hype to produce solar modules. Back in 2007, the market became very hungry for modules. The availability of modules counted for more than the brand name. Now European and US banks are hesitant to provide PV project finance. A manufacturer needs to be highly bankable, or at least will need to offer sufficient financial guarantees, before any shipments can take place. If a company fails, all its modules will need to be returned, or the investor repaid. Only the bigger, financially sound companies will be able to fulfill these requirements. The first signs from China are that several smaller manufacturers are stopping production or actively looking for a takeover.
Companies and (big) manufacturers with healthy balance sheets and full order books will be in a good position to survive a difficult 2009.
The second wave
Nevertheless, it could turn out that the future winners among the manufacturers will be relatively unknown players: companies that have just started producing solar wafers, cells and modules, that have a strong vision, a conviction that the solar energy market will continue to grow in the long term, and deep pockets to see them through a difficult start-up phase under the current economic conditions.
Some major production initiatives by industrial companies or conglomerates with a variety of backgrounds have been announced or are underway ? from a glass manufacturer (CSG), to an industrial glove manufacturer (QS solar), to an energy utility (ENN), to a manufacturer of electronic devices (Chint). Their balance sheets will easily be more robust than those of the better-known existing European module manufacturers.
The benefit for European and US companies is that the Chinese companies will still need to develop their sales and distribution network structures in key markets. They are keen to do business directly with bigger end customers like PV project developers. And they are willing to offer financial security packages to overcome the doubts of banks and customers. Developers in Europe might ask themselves why they should pay ?0.30/Wp more for a well-known European module brand if the Chinese manufacturer is offering a full financial security package and is backed by a hundredmillion or more dollar parent company with thousands of employees.
It is difficult to give prices for their modules, since currencies are so volatile, but recently prices have been offered of between $3.60 and $3.75/Wp for deliveries of crystalline modules up to the end of 2008.
Several of these major new Chinese players have moved into thin film. In 2009 alone, total installed capacity could exceed 1.5 GW, then rapidly expand to double that figure one year later. This new wave of solar modules will start coming onto the market in early 2009, when the products will have their full IEC/UL certification. Prices will depend on the state of the dollar, but offers have been seen of $2.50/Wp.
These major new players may very well be among the manufacturers that survive the imminent consolidation phase. They can take a little head wind and prepare themselves for rapid market growth in the long term, when it will be full steam ahead once more.
By: Edwin Koot (CEO solarplaza)
31 October 2008 - The global solar energy market in 2008 is expected to grow by 50% compared to 2007. The Chinese solar PV industry is growing rapidly and will soon be the biggest producer of solar cells and modules in the world. There are now over 100 Chinese solar module manufacturers, and even more new market players are expected in the short term. The question is: what might the current credit crisis and pessimistic economic forecasts mean for the PV market and industry in 2009? With solar modules becoming a commodity product, China will definitely be playing a key role as a major producer of solar cells and modules. However, if we look at the maturity of the PV industry right now, and what has happened in other industries, an imminent consolidation phase seems likely. That could mean that fewer producers, and only the bigger ones among them, will survive. So which companies are likely to be the winners, and be reliable business partners for the long term?
Global PV market developments
The PV market is likely to grow less rapidly in 2009. First of all, the world's biggest market in 2008 - Spain - has reduced its support for solar energy. Feed-in tariffs will be cut by 30% in 2009 and, even more significantly, only 500 MWp of new installed PV power will be eligible for this feed-in tariff. This could lead to a decrease in volume for the Spanish market of more than 60%. With feed-in tariffs going down by around 10% in the German PV market, which was the world's biggest PV market for many years, it is likely to grow, but at a moderate rate. Growth in other markets is also dependent on government support programs. And although the US government recently agreed on an eight-year extension of the federal tax credit scheme for solar energy, the US market is not likely to grow very rapidly. The current credit crisis, and the economic recession forecasted for 2009, will limit the available finance from banks, and therefore also limit the development of new PV projects.
On the supply side, along with the global PV industry as a whole, supply will grow even faster than market demand in 2009. A conservative forecast by the Prometheus Institute suggests that solar module production volume will grow by a massive 80% in 2009. Most of the investments in new production capacity were planned between late 2007 and 2008, under the highly profitable market conditions.
Consolidation phase
Last September, SolarPlaza held the second Global PV Demand Conference in Valencia, Spain. The conclusion was that the huge growth in solar module production over the next two years, compared with the ?modest? growth in demand, would lead to an oversupply situation commencing in 2009. The experts in attendance predicted that this would create a consolidation phase in the PV industry. This conclusion was drawn even before the international credit crisis began. The difficulty in obtaining finance for new solar energy systems is now visible in the European PV markets. Even worse is the situation in the USA. Not only is the credit market frozen, the country is also facing economic recession in 2009 and possibly even 2010. Under these conditions, with the oil price falling and with no bank to finance PV system investments, customers might think twice about spending their savings on solar energy. Therefore, the credit and economic crisis may prevent rapid growth in both the US and the global PV markets. Together with the inevitable oversupply situation already predicted for 2009, the solar PV industry could be facing very hard times over the next two years. For the longer term, market forecasts are extremely positive. Industry consolidation will bring module prices down further. And, within a few years, one solar kilowatt hour will equal the price of electricity from the grid (?grid parity?) in the world's sunny regions. This will unleash unlimited market potential.
As a result, for the short term, financially weaker solar cell and module manufacturers, and those without a foothold in the world's key PV markets, will be put out of business or driven into the hands of some larger partner. In other words, the global economic crisis will speed up the consolidation phase in the PV industry.
Who will be the winners?
The world's leading manufacturers in the solar industry are well placed for continued growth in 2009. The top 10 of the world's biggest solar module manufacturers includes several Chinese companies, like Suntech Power, Yingli Solar and Trina Solar. These companies started up during the first wave of new Chinese PV industries a few years ago, and all three of them are listed on the New York Stock Exchange. They have grown rapidly and made healthy profits in 2007 and 2008. Their track record will help them to remain on the shortlist of banks financing PV projects. Their full order books will help them through a more difficult market phase in 2009. However, there are dozens of other manufacturers out there on the market. Many of them are relatively small, or just started trading in 2007, following the hype to produce solar modules. Back in 2007, the market became very hungry for modules. The availability of modules counted for more than the brand name. Now European and US banks are hesitant to provide PV project finance. A manufacturer needs to be highly bankable, or at least will need to offer sufficient financial guarantees, before any shipments can take place. If a company fails, all its modules will need to be returned, or the investor repaid. Only the bigger, financially sound companies will be able to fulfill these requirements. The first signs from China are that several smaller manufacturers are stopping production or actively looking for a takeover.
Companies and (big) manufacturers with healthy balance sheets and full order books will be in a good position to survive a difficult 2009.
The second wave
Nevertheless, it could turn out that the future winners among the manufacturers will be relatively unknown players: companies that have just started producing solar wafers, cells and modules, that have a strong vision, a conviction that the solar energy market will continue to grow in the long term, and deep pockets to see them through a difficult start-up phase under the current economic conditions.
Some major production initiatives by industrial companies or conglomerates with a variety of backgrounds have been announced or are underway ? from a glass manufacturer (CSG), to an industrial glove manufacturer (QS solar), to an energy utility (ENN), to a manufacturer of electronic devices (Chint). Their balance sheets will easily be more robust than those of the better-known existing European module manufacturers.
The benefit for European and US companies is that the Chinese companies will still need to develop their sales and distribution network structures in key markets. They are keen to do business directly with bigger end customers like PV project developers. And they are willing to offer financial security packages to overcome the doubts of banks and customers. Developers in Europe might ask themselves why they should pay ?0.30/Wp more for a well-known European module brand if the Chinese manufacturer is offering a full financial security package and is backed by a hundredmillion or more dollar parent company with thousands of employees.
It is difficult to give prices for their modules, since currencies are so volatile, but recently prices have been offered of between $3.60 and $3.75/Wp for deliveries of crystalline modules up to the end of 2008.
Several of these major new Chinese players have moved into thin film. In 2009 alone, total installed capacity could exceed 1.5 GW, then rapidly expand to double that figure one year later. This new wave of solar modules will start coming onto the market in early 2009, when the products will have their full IEC/UL certification. Prices will depend on the state of the dollar, but offers have been seen of $2.50/Wp.
These major new players may very well be among the manufacturers that survive the imminent consolidation phase. They can take a little head wind and prepare themselves for rapid market growth in the long term, when it will be full steam ahead once more.
Sunday, May 4, 2008
Yingli Green Energy Signs Sales Contract with Japanese PV System Integrator for Projects in Germany
BAODING, China--(BUSINESS WIRE)--Yingli Green Energy Holding Company Limited (NYSE: YGE) ("Yingli Green Energy" or the "Company"), one of the world's leading vertically integrated photovoltaic ("PV") product manufacturers, today announced that it has signed a sales contract with Eiko Trading Corporation JP ("EIKO"), which is engaged in the development and installation of PV systems in Japan and consulting, trading and investing in renewable energy projects with global partners.
Under the terms of the contract, Yingli Green Energy will supply 17.35 MW of PV modules to EIKO for planned projects in Germany. The shipment will be delivered between April and November 2008.
"We initiated our business cooperation with Yingli in mid-2007," commented Mr. Rui Chen, President of EIKO. "The performance, reliability and quality of Yingli's PV modules have impressed both us and our clients. These qualities, in addition to their excellent customer service, convinced us to deepen our business relationship with Yingli through 2008 and purchase a significant quantity of PV modules for projects in Germany. Our strategy is to provide reliable and flexible turnkey PV system solutions to our customers and Yingli shares our vision. We expect our cooperation with Yingli to develop into a more strategic, long-term relationship as we both continue to grow rapidly."
"After achieving much success in the Japanese market, EIKO is now looking to leverage its knowledge and experience to allow it to move into overseas markets, and obviously Germany stands out as one of the most important long term markets," commented Mr. Liansheng Miao, Chairman and Chief Executive Officer of Yingli Green Energy. "Our solid market presence and well-regarded brand name were major factors that prompted EIKO to choose Yingli as one of its top-tier partners in Germany. Germany has been the major driver in turning the PV industry into the global business that it is today. We believe this partnership with EIKO will further strengthen our presence in the world's largest market and act as a springboard to allow us to move forward into the exciting future of the PV industry."
About Yingli Green Energy
Yingli Green Energy Holding Company Limited is one of the world's leading vertically integrated PV product manufacturers. Through the Company's principal operating subsidiary in China, Baoding Tianwei Yingli New Energy Resources Co., Ltd., Yingli Green Energy designs, manufactures and sells PV modules and designs, assembles, sells and installs PV systems that are connected to an electricity transmission grid or those that operate on a stand-alone basis. With 200 MW of total annual production capacity in each of polysilicon ingots and wafers, PV cells and PV modules, Yingli Green Energy is currently one of the largest manufacturers of PV products in the world as measured by annual production capacity. Additionally, Yingli Green Energy is one of the limited numbers of large-scale PV companies in the world to have adopted vertical integration as its business model. Yingli Green Energy currently plans to gradually expand annual production capacity of polysilicon ingots and wafers, PV cells and PV modules to 400 MW by the end of 2008 and to 600 MW by the end of 2009. Yingli Green Energy sells PV modules under its own brand name, Yingli Solar, to PV system integrators and distributors located in various markets around the world, including Germany, Spain, Italy, China and the United States. For more information, please visit www.yinglisolar.com.
About EIKO
Eiko Trading Corporation JP is engaged in the development and installation of PV systems in Japan together with consulting, trading and investing in the renewable energy development sector with global partners. EIKO works as a strategic partner with pension funds in Germany and engages in a series of investment and management of photovoltaic projects mainly in Germany and throughout Europe.
Under the terms of the contract, Yingli Green Energy will supply 17.35 MW of PV modules to EIKO for planned projects in Germany. The shipment will be delivered between April and November 2008.
"We initiated our business cooperation with Yingli in mid-2007," commented Mr. Rui Chen, President of EIKO. "The performance, reliability and quality of Yingli's PV modules have impressed both us and our clients. These qualities, in addition to their excellent customer service, convinced us to deepen our business relationship with Yingli through 2008 and purchase a significant quantity of PV modules for projects in Germany. Our strategy is to provide reliable and flexible turnkey PV system solutions to our customers and Yingli shares our vision. We expect our cooperation with Yingli to develop into a more strategic, long-term relationship as we both continue to grow rapidly."
"After achieving much success in the Japanese market, EIKO is now looking to leverage its knowledge and experience to allow it to move into overseas markets, and obviously Germany stands out as one of the most important long term markets," commented Mr. Liansheng Miao, Chairman and Chief Executive Officer of Yingli Green Energy. "Our solid market presence and well-regarded brand name were major factors that prompted EIKO to choose Yingli as one of its top-tier partners in Germany. Germany has been the major driver in turning the PV industry into the global business that it is today. We believe this partnership with EIKO will further strengthen our presence in the world's largest market and act as a springboard to allow us to move forward into the exciting future of the PV industry."
About Yingli Green Energy
Yingli Green Energy Holding Company Limited is one of the world's leading vertically integrated PV product manufacturers. Through the Company's principal operating subsidiary in China, Baoding Tianwei Yingli New Energy Resources Co., Ltd., Yingli Green Energy designs, manufactures and sells PV modules and designs, assembles, sells and installs PV systems that are connected to an electricity transmission grid or those that operate on a stand-alone basis. With 200 MW of total annual production capacity in each of polysilicon ingots and wafers, PV cells and PV modules, Yingli Green Energy is currently one of the largest manufacturers of PV products in the world as measured by annual production capacity. Additionally, Yingli Green Energy is one of the limited numbers of large-scale PV companies in the world to have adopted vertical integration as its business model. Yingli Green Energy currently plans to gradually expand annual production capacity of polysilicon ingots and wafers, PV cells and PV modules to 400 MW by the end of 2008 and to 600 MW by the end of 2009. Yingli Green Energy sells PV modules under its own brand name, Yingli Solar, to PV system integrators and distributors located in various markets around the world, including Germany, Spain, Italy, China and the United States. For more information, please visit www.yinglisolar.com.
About EIKO
Eiko Trading Corporation JP is engaged in the development and installation of PV systems in Japan together with consulting, trading and investing in the renewable energy development sector with global partners. EIKO works as a strategic partner with pension funds in Germany and engages in a series of investment and management of photovoltaic projects mainly in Germany and throughout Europe.
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