Reported by Jeanny H. Lim
What do you see as the trends and market forces driving PV technology in the second half of 2011?
The industry is at the very edge of a major change. A reason behind that is first of all, there is oversupply in the market now and secondly the market is entering into a very mature stage with governments trying to change their policies to make sure the growth is sustainable. Now, governments are trying to avoid creating a whole bunch of gold rush which can suddenly stop. I think that is very healthy to the industry.
What is noticed in the market now is that a lot of players entering into the market, which is creating oversupply, and that there is pressure on cost reduction. In the next two to three years, there will be a transition in the solar industry moving from a government subsidy-driven market into grid parity. Right now, the industry is not really a renewable energy business. It’s more of an investment business, I would say. Real motivation behind this industry right now is still investment returns. However, the market will move away from that and two to three years down the road, you would see more demand is coming from true energy demand. So that would open a totally new market.
Another major change in the industry from now on in the next two to three years is Europe’s share of the total demand is going to decrease. We are going to see demand increasing in the U.S.A., india, China, Southeast Asia and some other markets. Even in South America such as Chile and Brazil.
Channel-wise, companies need to diversify into more markets. Business-model wise, business model has to be independent of government subsidies. People have to think how a company can survive without government subsidies. That’s a big topic.
Technology-wise, the room for cost reduction on the material side is very limited now. Because of the very high upfront investment, they need a higher margin. So there is not much room for cost reduction. And wafer, cell and module markets are squeezed already, so to further reduce cost, I guess there are two different directions to go: One is to increase the efficiency and second is consolidation. From silicon to projects, there are just too many players. You’ll see a lot of consolidations in the market going forword.
What is Canadian Solar doing to get ahead of the competition in the market?
In terms of cost reduction, our vertical integration is much improved and we are fully integrated. We are significantly increasing our cell capacity by 600 MW and in the end we’ll reach 1.2 GW this year. We have joint venture or long-term binding contracts to lock down additional volume to match our module capacity. Wafer side is the same thing: Joint venture or long-term binding contracts. So, we’re not worried about additional cost. We’ll continue to drive down the processing cost and material cost.
Efficiency-wise, we are very aggressive. We’ve introduced new products with very high efficiency. For the same size panel, we claim we provide the highest efficiency in the market.
Where do you put your focus this year, in terms of business growth and technology development?
In terms of business growth, we will aggressively grow our business in high margin markets like Japan and Canada. And we’ll also enter the emerging markets. Business model-wise, we intend to enhance our strength as a full solution provider: We are building up our battery capacity and enhancing our EPC capability.
On the efficiency side, that’s an ongoing topic. We have to increase our efficiency every quarter. We have a very tough efficiency roadmap.
How are PV prices expected to develop in the second half?
We have seen significant declines in raw materials costs so far in Q2, including lower costs for polysilicon, wafer and cells, which we expect to help lessen the impact of expected declines in module ASP.
Jeanny H. Lim is Editor-in-Chief of InterPV. Send your comments to email@example.com.
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