Pressure grows within thin-film PV industry

02 Jul 2008

Global output from thin-film photovoltaics will reach 3.5 GW in 2010, but only a minority of the companies intending to be in production by then will achieve their objective.

“This will separate the wheat from the chaff.”

Thin-film solar technologies will achieve grid parity, the point at which their photovoltaic (PV) electricity is equal to or cheaper than grid power, between 2012 and 2016 in Europe. A study by EuPD Research estimates that the global production output for thin-film PVs will reach 3.5 GW by 2010, although demand between 2008 and 2010 will be based on only 10 country markets. Some of these markets are predicted to partially stagnate, increasing the pressure on manufacturers.

The competitive intensity within the industry will increase, although the new players are not considered to be a great threat by the established players. One reason for this is that the handling of the production process is seen as a major hindrance to starting thin-film production. In fact, only 20% of the 120 entrants in the thin-film sector are expected to be able to start commercial PV production before 2010 and stick to their announced timelines, according to the study.

"It is one thing to announce ambitious production plans, but another to successfully integrate the complex production steps," said Markus Hoehner of EuPD Research. "This will separate the wheat from the chaff."

What worries the survey participants most is the sluggish global demand. The decreasing level of PV promotion in the main European markets and the insecure market developments in Asia and the US make it questionable if the demand for PV products will grow according to the production output boom.

But in an increasingly complicated market environment, thin-film PV has important advantages over the crystalline competition. The potential for cost reductions is higher, and developments such as the use of flexible substrates could open up new market segments. "Through product differentiation, new customer groups can be discovered. This assures module sales, especially when demand in present markets is stagnating," said EuPD's Stephan Franz.

Photovoltaic Thin Film Study - Market Overview by EuPD Research is available from Research and Markets.