SAN JOSE, Calif. - There is a lull in the IC market, but solar is up. In fact, polysilicon and solar wafer prices are up and will likely to remain firm in the first half of next year.
Needham & Co. LLC has raised its forecast for the solar cell industry in 2010 and 2011. Previously, the firm projected 58 percent growth in 2010 and only 13 percent in 2011.
''We are raising our 2010 worldwide solar installation projection to 12.9GW, up 82 percent year-over-year. For 2011, we are modeling a modest growth rate of 17 percent to 15.1GW,'' said Edwin Mok, an analyst with Needham & Co., in a new report.
And in one indicator, the solar cell supply chain is tight. ''Recent checks suggest the poly spot price is tracking at (about) $60/kg, up from $55-60/kg just one month ago,'' Mok said. ''Similarly, the wafer spot price is pushing $0.90/W (was $0.85-$0.90/W). We believe strong poly and wafer pricing trends indicate that poly/wafer supplies have been quite tight. We believe supplies will further tighten in 4Q10 and into 2011, as new cell/module capacities come online and support incremental demand. We understand that cells continue to be quoted at US$1.30-1.35/W and modules at EUR 1.35-1.45 in 2H10, but expect 10 percent-plus declines in 1H11.''
Solar itself is warming up in the second half of 2010. ''After a slower seasonal start to 3Q10 partially due to the FIT (Feed-in-Tariff) cut in Germany, we believe unit demand from Europe has strengthened since August. We believe the rate of installation across Europe should be at least sequentially flat in 3Q10, driven by attractive IRRs in various countries and firm pricing, even after the FiT cut in Germany. Looking into 4Q10, we believe demand will remain strong as customers rush to place orders ahead of the expected FiT cuts in Germany, France, Italy, etc. We believe strong near term demand could drive further upside to 2H10 shipments,'' he said.
And what about 2011? ''We believe installation in Germany will hit 6.8GW this year but is likely to decline in 2011 due to the lower FiT rate. We believe Italy's 3-step FiT reduction in 2011 will have an effect similar to what we saw in Germany this year,'' he said. ''As a result, we expect demand in Italy to remain strong throughout 2011. We see good growth in the U.S., Japan, Ontario Canada and China, but see downside risk in France and the Czech Republic based on our expectation of further FiT cuts and the potential for implementing installation caps.''
Aggressive government incentives are set to trigger booming growth in solar installations in Ontario, Canada, in 2010, according to market research firm iSuppli Corp.
Ontario’s PV solar technology system installations are expected to rise to 257 Megawatts (MW) in 2010, up 272.5 percent from 69MW in 2009. However, installation growth will slow dramatically in 2010, rising by 75.5 percent to 451MW in 2011.
“Ontario in 2009 passed the Green Energy and Green Economy Act, adopting an aggressive green energy policy that includes a Feed-In Tariff (FIT) program as its centerpiece,” said Mike Sheppard, financial services/PV analyst for iSuppli, in a report. “This FIT program represents North America’s first comprehensive guaranteed pricing structure for electricity production from renewable fuels sources including solar PV, bio-energy waterpower and wind.”
A major factor driving the FIT is Ontario’s plan to phase out coal-based electrical generation by 2014. Coal in 2008 represented 21 percent of Ontario’s electricity generation, a gap that must be filled by renewable energy technologies, solar power trends show.
It's a little surprising that the market is as stable as it is. Massive amounts of manufacturing supply have come online while government subsidies have kickstarted supply. Here in Southern Cal panel sets seem to be showing up all over, and several friends have been curious about mine. Add the price hikes that SDG&E is pushing and, locally at least, there is a lot of interest.
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