IMS Research: PV market under heavy price, supply pressures

The PV market is undergoing changes and challenges, especially in the U.S., because of rapid growth potential globally


When photovoltaic module supplier Solyndra announced it would close its U.S. manufacturing facility, it marked the third time in a month such an announcement had been made.

IMS Research analyst Sam Wilkinson noted the challenges in the PV market, especially for smaller companies, because of the highly competitive global market. Despite the rapid growth potential for the PV market, and recent announcements of manufacturing expansion by companies such as Schneider Electric and Siemens of increased manufacturing capacity in the space, the PV market is expected to be price-driven for quite some time. Wilkinson spoke with CFE Media about the recent changes in the market and ways new manufacturers can try and gain a foothold in the PV market:

CFE: The consolidation in the PV manufacturing market seems to be driven by supply-side issues. It’s a huge growth market, but late arrivers on the manufacturing side are facing higher costs. What are the cost barriers for PV manufacturers right now?

Wilkinson: The main cost barrier is certainly getting to large-scale production to get costs down. Suppliers can’t afford to be in the low volume/start-up mode for long.

CFE: What is the manufacturing cost advantage for the Chinese manufacturers? How big a role do issues such as quality and other “soft” manufacturing costs play in this market?

Wilkinson: China benefits from strong governmental financial support, low labor costs and low electricity costs. There certainly has been some concerns over the quality of Chinese Tier-2 product in the past. However, the more established Tier-1 brands have certainly already overcome the perception that Chinese product is of a unacceptable quality.

CFE: Let’s look at the other side. We’ve seen global manufacturers like Schneider Electric and Siemens announcing expansion of their PV converter manufacturing business, and they see huge growth potential for PV in the U.S. and elsewhere. How quickly are companies looking to adopt solar as an energy source, and what’s the growth potential?

Wilkinson: There certainly has been some success for large industrial electronics companies entering the PV market. This is most typically seen in the inverter space (as the these are often similar to a company’s existing products). The solar market is expanding fast, the other attractive thing about the inverter space (in comparison to modules) is the relatively fewer number of suppliers.

CFE: Do you see PV adoption growth overtaking supply anytime soon?

Wilkinson: Given the huge volume of capacity that has been bought online over the last few years, and the comparatively steady growth that we forecast for demand, I definitely see oversupply being more likely than undersupply over the next few years.

CFE: How can smaller manufacturers of PV survive in this market right now?

Wilkinson: I believe that right now (and for the next few years), small manufacturers either need to have a unique product (with a unique value proposition) and a strong brand, or they need to have scale and volume in order to reach cost structures that will allow them to compete.

No comments
The Top Plant program honors outstanding manufacturing facilities in North America. View the 2015 Top Plant.
The Product of the Year program recognizes products newly released in the manufacturing industries.
The Engineering Leaders Under 40 program identifies and gives recognition to young engineers who...
Safety for 18 years, warehouse maintenance tips, Ethernet and the IIoT, GAMS 2016 recap
2016 Engineering Leaders Under 40; Future vision: Where is manufacturing headed?; Electrical distribution, redefined
Strategic outsourcing delivers efficiency; Sleeve bearing clearance; Causes of water hammer; Improve air quality; Maintenance safety; GAMS preview
SCADA at the junction, Managing risk through maintenance, Moving at the speed of data
Safety at every angle, Big Data's impact on operations, bridging the skills gap
The digital oilfield: Utilizing Big Data can yield big savings; Virtualization a real solution; Tracking SIS performance
Applying network redundancy; Overcoming loop tuning challenges; PID control and networks
Driving motor efficiency; Preventing arc flash in mission critical facilities; Integrating alternative power and existing electrical systems
Package boilers; Natural gas infrared heating; Thermal treasure; Standby generation; Natural gas supports green efforts

Annual Salary Survey

Before the calendar turned, 2016 already had the makings of a pivotal year for manufacturing, and for the world.

There were the big events for the year, including the United States as Partner Country at Hannover Messe in April and the 2016 International Manufacturing Technology Show in Chicago in September. There's also the matter of the U.S. presidential elections in November, which promise to shape policy in manufacturing for years to come.

But the year started with global economic turmoil, as a slowdown in Chinese manufacturing triggered a worldwide stock hiccup that sent values plummeting. The continued plunge in world oil prices has resulted in a slowdown in exploration and, by extension, the manufacture of exploration equipment.

Read more: 2015 Salary Survey

Maintenance and reliability tips and best practices from the maintenance and reliability coaches at Allied Reliability Group.
The One Voice for Manufacturing blog reports on federal public policy issues impacting the manufacturing sector. One Voice is a joint effort by the National Tooling and Machining...
The Society for Maintenance and Reliability Professionals an organization devoted...
Join this ongoing discussion of machine guarding topics, including solutions assessments, regulatory compliance, gap analysis...
IMS Research, recently acquired by IHS Inc., is a leading independent supplier of market research and consultancy to the global electronics industry.
Maintenance is not optional in manufacturing. It’s a profit center, driving productivity and uptime while reducing overall repair costs.
The Lachance on CMMS blog is about current maintenance topics. Blogger Paul Lachance is president and chief technology officer for Smartware Group.
This article collection contains several articles on the vital role of plant safety and offers advice on best practices.
This article collection contains several articles on the Industrial Internet of Things (IIoT) and how it is transforming manufacturing.
This article collection contains several articles on strategic maintenance and understanding all the parts of your plant.
click me