A new analysis from California-based global business consulting firm, Frost & Sullivan states that by 2018, the Asian solar PV market will reach USD 4.80 billion. The report titled “Strategic Analysis of Asian Photovoltaic Materials Market” discovered that the Asian market earned revenues of 1.94 billion USD in 2012 and estimates this to reach 4.80 billion by 2018. It also states that China, Taiwan and Japan together account for over 70 per cent of the global solar PV cell or module production.
Due to the cost advantage, Asia has become the production hub for solar PV materials with most of the PV material suppliers moving their production base to Asia in the last few years. Moreover, there is growing consumer awareness on environment issues and strong commitments to reduce carbon emissions that has fired the interest in renewable energy. This has increased the market potential for PV materials. Frost & Sullivan’s analysis also states that government-support in the form of tax credits, subsidies and feed-in tariff mechanisms has added to the demand for PV modules, and thereby PV materials in Asia. Also, constant technological modernizations that drive the competitiveness of PV-based power along with increasing efficiency are leading to lower costs per watt in the Asian PV materials market.
The analysis covered three key PV materials: frontsheets, encapsulants and backsheets.
Mr. Balasubramaniam Ramani, Senior Consultant (Chemicals and Materials) at Frost & Sullivan said that the global PV material manufacturers have established strong partnerships with PV module manufacturers, supporting market development. The close connection between module manufacturers and material suppliers improves the material suppliers’ insight into the market and ensures timely delivery as well as enhanced product offerings.
The report also predicts that the PV materials market may move towards the next stage of expansion, where achieving grid parity and affordability without relying on government subsidies will be vital. Mr. Ramani adds that the challenge lies in improving technology while keeping costs down. He maintains that the pressure to lower prices has already enormously affected margins and removed a number of smaller market participants, even compelling some to withdraw from the market. The challenge is also augmented by the economic turndown and the price wars, which will affect both revenue and bottom line in the future.
Despite predicting a 4.80 billion in 2018, the report notes that the Asian PV materials market will witness only a moderate growth between 2012 and 2015. The report attributes this to the narrowing of incentive policies, which has slowed down the solar industry and in turn, the PV materials market. Moreover, sudden changes in government support plans can harm the industry, as the uncertainty discourages both investors and manufacturers, the report points out.
The period between 2015 and 2020 will be one of rapid growth primarily due to the likely shift of backsheet production which is the only segment that is yet to move its production from European countries to Asia, stated Mr. Ramani.
“Japan and China are likely to surpass European countries in terms of PV installations after 2015, lending strong momentum to the Asian PV materials market,” he added.