RenewableS 2013 GlObal STaTUS RePORT - REN21

plant that started operating in 2012, followed by Spain, China
and Chinese Taipei/Taiwan, Italy, and Australia. 57 CPV is also
spreading to new markets in North Africa, the Middle East, and
South America. 58
Solar PV is starting to play a substantial role in electricity
generation in some countries, meeting an estimated 5.6% of
national electricity demand in Italy and about 5% in Germany
in 2012, with far higher shares in both countries during sunny
months. 59 By year’s end, PV capacity in the EU was enough
to meet an estimated 2.6% of total consumption, and global
capacity in operation was enough to produce at least 110 TWh
of electricity per year. 60
■■Solar PV Industry
As in 2011, 2012 was a good year for solar PV distributors,
installers, and consumers, but cell and module manufacturers
struggled to survive let alone make a profit. An aggressive
capacity build-up in 2010 and 2011, especially in China,
resulted in excess production capacity and supply that,
alongside extreme competition, drove prices down further in
2012, yielding smaller margins for manufacturers and spurring
continued industry consolidation. 61 Low prices also have
challenged many thin film companies and the concentrating
solar industries, which are struggling to compete. 62
The average price of crystalline silicon solar modules fell by
30% or more in 2012, while thin film prices dropped about
20%. 63 Installed system costs are also falling, although not as
quickly, and they vary greatly across locations. From the second
quarter of 2008 to the same period in 2012, German residential
system costs fell from USD 7.00/Watt (W) to USD 2.20/W; by
contrast, average prices for U.S. residential systems had fallen
to USD 5.50/W. 64
Approximately 31.9 GW of crystalline silicon cells and 35.5 GW
of modules were produced in 2012, down slightly from 2011. 65
Despite several plant closures, year-end module production
capacity increased in 2012, with estimates ranging from below
60 GW to well over 70 GW. 66 China’s production capacity alone
exceeded the global market. 67 Thin film production declined
nearly 15% in 2012, to 4.1 GW, and its share of total global PV
production continued to fall. 68
Over the past decade, leadership in module production has
shifted from the United States, to Japan, to Europe, to Asia. 69
By 2012, Asia accounted for 86% of global production (up from
82% in 2011), with China producing almost two-thirds of the
world total. 70 Europe’s share continued to fall, from 14% in 2011
to 11% in 2012, and Japan’s share dropped from 6% to 5%. 71
The U.S. share remained at 3%; thin film accounted for 29%
of U.S. production, down from 41% in 2011. 72 Europe was still
competitive for polysilicon production, however, and the United
States was the leading producer. 73
The top 15 solar PV module manufacturers accounted for
half of the 35.5 GW produced globally; 11 of these companies
hailed from Asia. 74 Yingli (China) jumped ahead of both Suntech
(China) and First Solar (USA) to land in first position. First Solar
held its number-two spot, and Suntech fell to fourth after Trina
Solar (China). There was also much shifting in the ranks among
the other top players. 75 (See Figure 13, and Figure 13 in GSR
2012.)
Market consolidation continued in 2012. On the project development
side, merger and acquisition activity was driven by
large companies wanting to buy into project pipelines; among
manufacturers, even global companies with solid financing
suffered. 76 The string of failures and bankruptcies that began
in 2011 continued into 2013, due to overcapacity of module
production. 77
More than 24 U.S. solar manufacturers have left the industry
in recent years, and, by one estimate, about 10 European and
50 Chinese manufacturers went out of business during 2012. 78
Even “tier 1” Chinese companies like Yingli and Trina idled
plants and struggled to stay afloat. 79 By year’s end, China’s 10
largest manufacturers had borrowed almost USD 20 billion
from state-owned banks, and Suntech Power’s main operating
subsidiary declared bankruptcy in early 2013. 80 In India, 90% of
domestic manufacturing had closed or filed for debt restructuring
by early 2013. 81
Other Asian companies were busy buying up next-generation
U.S. solar technology, and Hanwha Group (South Korea) bought
the bankrupt Q-Cells (Germany), the top module manufacturer
in 2008. 82 First Solar (USA) and Panasonic (Japan) closed
production lines and/or suspended plans for new factories; GE
(USA) halted construction on its thin film factory in Colorado
and announced plans to return to R&D; Bosch Solar (Germany)
announced that it would stop making cells and panels in 2014;
and Siemens (Germany) announced its exit from the solar
business. 83 Most companies that remained in established
markets were investing in improving manufacturing processes,
rather than R&D, to reduce their costs. 84
Even as some manufacturers idled production capacity or
closed shop, others opened facilities and aggressively sought
new markets—particularly in the developing world. 85 New
plants opened around the globe in 2012, from Europe to Turkey,
Kazakhstan to Japan, and Malaysia to the United States. 86
Ethiopia’s first module-manufacturing facility (20 MW) began
operating in early 2013 to supply the domestic market. 87
Innovation and product differentiation have become increasingly
important, and successful manufacturers have diversified
both up- and downstream, with many expanding into project
development or building strategic partnerships. 88 First Solar
moved away from the residential market to focus on development
of utility-scale PV plants; First Solar and SunPower (USA)
both announced deals that will provide entry into the Chinese
market; Trina Solar is becoming a provider of total solar solutions;
and Canadian Solar is shifting into project development
and ownership. 89
The year 2012 was also mixed for CPV. Several companies,
including Skyline Solar and GreenVolts (both USA), closed their
doors, and SolFocus (USA) announced a decision to sell; but
those companies that were still operating invested increasing
amounts of time and money in building manufacturing facilities
in emerging markets. 90 The industry is currently in the commercialisation
phase, but several challenges remain, including
obtaining financing required to scale up projects, and demonstrating
continuous high yield outside the laboratory. 91
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Renewables 2013 Global Status Report 43