Worldwide investments in the production of Photovoltaic (PV) cells will rise to the same level as those for semiconductor manufacturing by 2010, due to booming demand for solar energy, according to iSuppli Corp.
Global production of PV cells is expected to rise to as much as 12 Gigawatts (GW) by 2010, up from 3.5GW in 2007. By 2010, as many as 400 production lines in the world that can produce at least 1 Megawatt (MW) of PV cells per year will be in place, representing a four-fold increase from about 90 to 100 production lines in 2007. Factories capable of 1GW of annual PV production also will be established in the future to ensure continued strong delivery of PV cells to the market.
“The market for PV cells is estimated to grow by 40 percent annually until 2010, and 20 percent beyond,” said Dr. Henning Wicht, senior director and principal analyst, MEMS and photovoltaics, for iSuppli. “Nearly all market participants plan to increase their sales by a Compound Annual Growth Rate (CAGR) of 40 to 50 percent during the next few years.”
Wicht noted that heavy investments will be required to finance the expansion of PV cell production. Each PV factory will require an investment of $500 million and more, will employ as many as 1,000 workers per site, and will generate annual revenue of $1 billion per year or more, putting them into the size, cost and employment range of semiconductor fabs.
Solar-powered market on the rise, PV cell production to get cheaper
Growth of the PV market is currently driven by several factors, Wicht said. While the high price of oil and surging energy prices fuel demand for solar power in the short term, demand will be no less in the years to come. Projections show the world will need three to four times more electrical power over the next 50 years to support continued growth in population and economic output. And by 2100, 80 percent of energy must be generated from renewable sources, according to the German Advisory Council On Global Change.
In a nod towards positive development, manufacturers affirmed that PV cell production will become cheaper in time. PV cell makers Q-Cells AG and REC Group said they expect a reduction in PV system costs by 40 percent from 2006 to 2010.
With these cost reductions, many regions throughout the world will soon reach grid parity—a point at which PV electricity costs the same or less than power derived from the electrical grid. PV grid parity is expected beginning 2012 in nations where sunshine is plentiful and constant, and 2018 in areas of the world with adequate or medium sun exposure.
iSuppli Corporation
