January brings a confusing mix of negative corporate news and renewed optimism for growth. Month in review
04 February 2012
Posted in News - SPVI news
The December's increase in sales caused a rush of orders and significant rise in utilization in Taiwan
The December's increase in sales caused a rush of orders and significant rise in utilization for the vertically integrated companies in China and cell companies in Taiwan. Number of the reports from solar research firms confirmed growth of 2011 installations, which taken financial markets by surprise. Two contributing areas of demand: Germany and Asia, with record results reportedly from China, dipped to stored inventory. In some broadcasts, demand was so good that it eliminated glut completely. High level of installations in Germany (IMS stating 4GW in Q4 alone) had caused inventory to sell off to the point that some firms were scrambling to provide the coverage for the demand in January. One of those companies, Canadian Solar, confirmed spike of the demand in the European markets, while selling 1.5 MW of modules to Abu Dhabi, making its largest order in the region. NDP Solarbuzz reported from interviews with Chinese CEOs expectations of shortage of modules by the end of the Q1 2012.
Solartech, a middle of the road, cell manufacturer increased its sales by 113% in comparison to December. Still Neo Solar, 2nd largest company in Taiwan by volume, grew sales only by 28%. The optimistic start of the year is a shadow of volume from 2011. On average sales are 75% less than January of 2011. Without numbers for Q4 2011 and only viewing data from Taiwan, Q1 2011 was the best quarter of the year for cell makers. However, since the glut was mostly in module, I expect positive in nature announcements for those companies which sold modules in the last quarter of the year. SolarWorld made new threats against Chinese now underlining the retroactive clause of its petition. While many observers noted increase in imports in Q4 due to traditional boom prior to FiT changes, SolarWorld concluded that increase of imports to US was an attempt to avoid fees. SolarWorld is becoming more irritating as time passes on, even more so, after Suntech Europe released materials showing German company branding Suntech’s modules as own in the time of prosperity, capitalizing on the cheap production. Once more ITC postponed the decision of its investigation, some speculating, to save booming solar market in US.
While Taiwanese cell manufacturers experienced rush of orders in January and hold a belief that sales in February will be even better, number of negative news had confirmed how difficult 2011 was for many companies.
On February 2nd, Japan’s Sumco Corporation announced exit from solar wafer business. Company will liquidate its subsidiary Sumco Solar and Minamata Denshi, a subsidiary specializing in raw materials. Sumco will take on the loss of JPY18 billion (US$236 million) to cover the cost of the exit. This is around 300MW per annum reduction, including 1,300 jobs. Earlier in the month Schott has announced closure of its wafer production, worth around 500MW. Schott stated to continue its efforts on solar cell conversion improvements, where the company has been recognized leader.
Last week company Bekaert NV, a solar wafer wire saw producer had announced that it is reducing production of the material in China, and in result will eliminate approximately 1,250 jobs in Mainland. Further reductions will eliminate 600 jobs in Aalter, in Belgium. Company plans to save over $100M annually. Some of the Chinese companies replaced procurement of wire with own production. Renesola started to produce wire in 2011, expecting to save $40M a year.
Sanyo announced closure of 30MW ingot and wafer factory in Carson, California, laying off approximately 140 personnel. In November 2011, Panasonic published plans for new factory in Malaysia to produce cells and modules, with intent to reduce wafer production. Panasonic shortly after taking over Sanyo issued a number of initiatives to integrate its operations. The popular high-conversion module branded as HIT, named after cell technology used (Heterojunction with Intrinsic Thin layer) and called Sanyo HIT, will be renamed as Panasonic HIT in campaign to make Panasonic a recognizable solar brand. In order to reshape its presence on the home turf Panasonic announced launching of this new (old) high conversion product in Japan, with 240W and 18.7% conversion (those modules are smaller in diameter than standard 60 cell module, hence higher conversion). Japan’s Kyocera as well announced new product, a powerful 315W module containing 80 cells. Large in output, product is destined for US market. Kyocera is considered one of the preferred brands in US, sharing top position with Sharp and Sunpower for last few years. In 2010 and 2011 Kyocera ranked third while Suntech and Yingli listed at 4th and 5th.
There was another round of equipment sales publicised recently. REC, which pocketed another $200M from canceled wafer contracts few days ago, is selling its equipment from plants in Norway. Those plants were shutdown in late 2011, in process of reorganization and cost reductions. There are approximately 975 MW of wafer production lines and other tools from makers like GT Advanced, Schmid, Roth and Rau, Mayer Burger available for sale. The two Solyndra auctions I wrote about last time were canceled due to lack of viable bids, and chances are that equipment REC is selling may not bring much of cash to the company. Regardless REC has written off majority of Norway assets in 2011, therefore any cash flow will have a positive effect.
In confirmation of renewed demand, Chinese company Yingli has signed a contract with German IBC Solar, for 180MW of panels with extension for another 20MW. Jinko continued its European marketing efforts through a sponsorship of a Valencia FC, one of the most recognizable names in Spanish league. Suntech and DuPont went into collaboration to market PV products and to focus on PV technology advancements, supply chain optimization, cost reduction. Hanwha SolarOne (12MW) and Sunergy (13MW) supplied modules for the 25 MW Indian solar plant, in the district of Gujarat. Power One delivered the inverters.
MiaSole production line photo: MiaSole Solar
I have written about my speculation about Chinese companies attempting to take over the players on European market. To my surprise China’s National Offshore Oil Corp.’s battery unit will invest $300 million in a venture with Spanish company Isofoton SA to develop photovoltaic plants across Asia. The new venture will have a supply form Spain and from the plant in US, which Isofoton is building currently. Isofoton is a small player but can attract attention. In 2011 Spanish company received investment from Samsung for solar cells in Malaga, Spain worth $50M.
Lastly, piece of news from thin-film and CIGS, world not often visited by me. MiaSole of Santa Clara, CA, which makes copper indium gallium selenide (CIGS) thin-film photovoltaic panels, says that it has achieved a solar-energy conversion efficiency of 17.3%, while its manufacturing process for 14% efficiency is now in production. Company did not disclose costs of such a module. According to Greentechmedia, MiaSole had let go 10% of its workforce recently, and the CEO of the company told Reuters in December , that company was looking urgently for partners. Partnership seems to be a practical way for CIGS companies to stay in business. CIGS company, Stion, raised $50 million from Taiwan Semiconductor Manufacturing Co., which licensed Stion’s technology and will sell solar panels made on it in the first quarter of 2012. HelioVolt, received $50 million from Korean SK Group and is looking at building a factory in Korea. Lux Research believes that CIGS market will double to 2.4 GW from current levels. Lux is pointing to their favorite, Solar Frontier of Japan, as the future leader of the category. Frontier has the biggest CIS plant in the world, Kunitomi Palnt with 900MW capacity. Frontier produces CIS modules, which have copper, indium and selenium. Those are considered suitable for hot climates like India, where they do not suffer drop in conversion ability, problem traditionally associated with c-Si modules in high temperatures. In addition, thin-film and CIGS are exempt from the domestic content rule and have unlimited sale potential as part of National Mission leading to Indian FiT. Solar Frontier is a 100% subsidiary of Showa Shell Sekiyu K.K.