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Perspectives on future large-scale manufacturing of PV in Europe

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Abstract and Figures

European industry played a key role in the rapid growth of PV over the last decade. The manufacturing sector (including production equipment) reached a peak turnover of approximately €20bn, and about 260 000 direct jobs in 2010. However in 2014, this turnover has declined to €2.5bn, due to both the sharp decrease in the price of PV and to a shift of cell and module production to Asia. At the same time the growing PV market continues to present substantial business opportunities.. It is estimated that in 2030 PV could supply up to 15% of the overall electricity demand in the EU, about 7 times more than today. The IEA predicts that global cumulative installed capacity of solar photovoltaic electricity systems will more than triple from 2013 to 2020, reaching over 440 GW. What role could or should European industry play in these developments? Several research consortia are actively prompting plans and seeking funding for such developments, for both crystalline silicon and thin film technologies. The Round Table discussion on "Scientific Support to Europe´s Photovoltaic Manufacturing Industry" organised by JRC and ENER in January 2015 confirmed this interest - the resulting position paper from the participants is included here in Annex 1. This report looks briefly at a range of factors that can influence the prospects for realising these ambitions. The main findings include: · PV manufacturing is transforming into a mass-producing industry with its sights on multi-GW production sites. This development is linked to increasing industry consolidation, which presents a risk and an opportunity at the same time. For small and medium companies to survive the price pressure of the very competitive commodity mass market and offset the economies of scale enjoyed by bigger competitors, they will need to develop products with high added value or tailor-made solutions. The alternative is to offer technologically more advanced and cheaper solar cell concepts. · For a large-scale manufacturing initiative to be economically viable and to have impact on the global market it would need to aim for a capacity of several GW. This reflects the importance of economies of scale and also having a production volume sufficient to impact an annual EU market of at least 6 GW and a global market of 50 GW. It would need to meet a short-term module cost price target of below EUR 0.40/W and have a credible plan for further reduction. This reflects the reality that product differentiation is based primarily on price, and is expected to continue to be so in the medium term. Finally it is essential to involve partners with the expertise to successfully operate GW fabs. PV technology expertise alone is not sufficient. · To best mobilize EU resources, such an initiative should involve several European countries and regions and include a range of technologies and product forms. Finally, while PV electricity is increasingly competitive, it remains a sector driven by policy at both national and EU levels. The size and growth potential of the EU "home" market is also important for module manufacturing/assembly location. To reverse the currently contraction of the PV system installation market and enable it to grow again requires a major effort across the EU to ensure a stable investment environment and to reduce soft-costs and administrative barriers.
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Heinz Ossenbrink
Arnulf Jäger Waldau
Nigel Taylor
Irene Pinedo Pascua
Sandor Szabó
Perspectives on future large-scale
manufacturing of PV in Europe
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European Commission
Joint Research Centre
Institute for Energy and Transport
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Nigel Taylor
Address: Joint Research Centre, via Fermi 2749, Ispra, Italy
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Abstract
The growing global
PV market continues to present substantial business opportunities for Europe. The question is now:
what role could or should European manufacturing
Technology Platform's position paper released at the end of 2013 makes a clear case for re-
launching Europe's PV
manufacturing sector. Several groups
are actively prompting plans and seeking funding for such developments, for both
crystalline silicon and thin film technologies. This report summarises information on the range of factors that
may
influence the prospects for realising these ambitions
Perspectives on Large-Scale Manufacturing
of PV in Europe
H. Ossenbrink, A. Jäger Waldau, N. Taylor, I. Pinedo Pascua , S. Szabó
June 2015
Contents
EXECUTIVE SUMMARY ................................................................................................................................................................ 5
1. INTRODUCTION .................................................................................................................................................................. 7
2. PV INDUSTRY ....................................................................................................................................................................... 9
2.1. Solar Cell Production Capacities ................................................................................................................ 9
2.2. Module Production .......................................................................................................................................... 10
2.3. The Value Chain ............................................................................................................................................... 12
2.4. Jobs ......................................................................................................................................................................... 13
2.5. Very Large-Scale Manufacturing (Giga-Fabs) ................................................................................ 15
2.6. Background to China's rise as Leading PV Supplier and Installer ....................................... 16
3. PV MARKETS AND PRODUCTS ................................................................................................................................. 17
3.1. Projected Global and European Markets ............................................................................................ 17
3.2. Market Innovation ........................................................................................................................................... 17
3.3. PV Technology Innovation and Cost Reduction .............................................................................. 20
3.4. Financing environments move ahead ................................................................................................. 21
4. EXISTING INITIATIVES TO DEVELOP EU PV INDUSTRY .............................................................................. 23
5. EUROPEAN R&D LANDSCAPE .................................................................................................................................. 24
6. SUMMARY & CONCLUSIONS .................................................................................................................................... 28
REFERENCES ................................................................................................................................................................................. 29
Annex 1 Position Paper on the Future of the Photovoltaic Manufacturing Industry in Europe
E
XECUTIVE
S
UMMARY
European industry played a key role in the rapid growth of PV over the last decade. The
manufacturing sector (including production equipment) reached a peak turnover of
approximately €20bn, and about 260 000 direct jobs in 2010. However in 2014, this turnover
has declined to €2.5bn, due to both the sharp decrease in the price of PV and to a shift of cell
and module production to Asia.
At the same time the growing PV market continues to present substantial business
opportunities.. It is estimated that in 2030 PV could supply up to 15% of the overall electricity
demand in the EU, about 7 times more than today. The IEA predicts that global cumulative
installed capacity of solar photovoltaic electricity systems will more than triple from 2013 to
2020, reaching over 440 GW.
What role could or should European industry play in these developments? Several research
consortia are actively prompting plans and seeking funding for such developments, for both
crystalline silicon and thin film technologies. The Round Table discussion on "Scientific Support
to Europe´s Photovoltaic Manufacturing Industry" organised by JRC and ENER in January 2015
confirmed this interest - the resulting position paper from the participants is included here in
Annex 1.
This report looks briefly at a range of factors that can influence the prospects for realising
these ambitions. The main findings include:
PV manufacturing is transforming into a mass-producing industry with its sights on
multi-GW production sites. This development is linked to increasing industry
consolidation, which presents a risk and an opportunity at the same time. For small
and medium companies to survive the price pressure of the very competitive
commodity mass market and offset the economies of scale enjoyed by bigger
competitors, they will need to develop products with high added value or tailor-made
solutions. The alternative is to offer technologically more advanced and cheaper solar
cell concepts.
For a large-scale manufacturing initiative to be economically viable and to have impact
on the global market it would need to aim for a capacity of several GW. This reflects
the importance of economies of scale and also having a production volume sufficient
to impact an annual EU market of at least 6 GW and a global market of 50 GW. It
would need to meet a short-term module cost price target of below EUR 0.40/W and
have a credible plan for further reduction. This reflects the reality that product
differentiation is based primarily on price, and is expected to continue to be so in the
medium term. Finally it is essential to involve partners with the expertise to
successfully operate GW fabs. PV technology expertise alone is not sufficient.
To best mobilize EU resources, such an initiative should involve several European
countries and regions and include a range of technologies and product forms.
Finally, while PV electricity is increasingly competitive, it remains a sector driven by policy at
both national and EU levels. The size and growth potential of the EU "home" market is also
important for module manufacturing/assembly location. To reverse the currently contraction of
the PV system installation market and enable it to grow again requires a major effort across
the EU to ensure a stable investment environment and to reduce soft-costs and administrative
barriers.
6
7
1. I
NTRODUCTION
The European Union has set out plans for a new energy strategy based on a more secure,
sustainable and low-carbon economy. It has committed itself to achieve at least 27% share of
renewables by 2030 with the aim of encouraging private investment in infrastructure and low-
carbon technologies.
Photovoltaics are expected to make a significant contribution to achieving this goal, as being
the renewable energy technology with the largest scope for cost reduction and efficiency
gains. The global PV industry grew an average about 50% per year over the last 10 years, and
has reduced costs four-fold in the same period. Currently the EU member states have an
installed capacity of approximately 88 GW and in 2013 PV already provided about 2.7% of
Europe's electricity needs. It accounts for around 9% of all electricity generated by renewables
(which includes hydro, biomass and wind). Leading EU countries for PV power generation are
Germany, Italy and the UK, with significant increases noted in Romania (in 2013) and in
Bulgaria (in 2014) [1]. Nonetheless, PV remains a sector driven by policy at both national and
EU levels.
Looking forward, experts estimate that in 2030 PV could supply up to 15% of the overall
electricity demand in the EU, about 7 times more than today. At a global level, the IEA
Medium-Term Renewable Energy Market Report 2014 [2] estimates that cumulative installed
capacity of solar photovoltaic electricity systems will more than triple to over 440 GW by 2020
compared to 2013.
Therefore significant business opportunities exist right across the PV value chain, from
production through to development and operation of installations. European industry played a
key role in the rapid growth of PV over the last decade. The manufacturing sector (including
equipment) reached a turnover of approximately €20bn, and about 260 000 direct jobs.
However in 2014, this turnover has declined to €2.5bn. Indeed most of today's global PV
manufacturing is located in the PRC and Taiwan, but capacities in Japan, Korea, Malaysia and
Philippines are continuously increasing. In 2013 Asia as a whole accounted for more than 80%
of the world's production share and Europe held only 3% (while in 2008 Europe's global share
was 26% and Asia's 63%).
The question is: what role could or should European industry play in the enormous future
market for PV products? What policy measures would be appropriate? In 2014 European
Commission President Juncker declared that the EU should become the world number one in
renewable energies, as a matter of a responsible climate change policy but also an industrial
policy imperative. This commitment was confirmed in the Energy Union Package
communication in February 2015 [3].
The European Photovoltaic Technology Platform's position paper released at the end of 2013
[4] makes a clear case for re-launching Europe's PV manufacturing sector. Several groups of
research institutes are actively prompting plans and seeking funding for such developments,
for both crystalline silicon and thin film technologies. The stakeholder input [5] to the new SET-
Plan integrated road-map clearly targets "LAB-to-FAB" issues. It also draws attention to the
mitigation of risk and financing for large scale multi-gigawatt manufacturing as a key aspect
to provide a sound and competitive basis for the European PV industry, and the need for
schemes to move from pilot production into large scale industrialisation".
In 2014 DG-ENTR (now DG-GROW) released a study commissioned from ICF International on
competitiveness of the EU renewable energy industry, including solar PV [6]. While cautiously
optimistic for the sector as a whole, and in particular for the downstream side (project
development and operation), the analysis also highlighted some of the challenges facing
manufacturers: "Those EU companies that manage to survive the current turmoil in the solar
PV market will clearly be better placed to compete globally and are worthy of investigation into
8
strategies for success. However, the sector is still undergoing transition. China's tier one PV
module manufacturers are on track to cut production costs from $0.50/watt to US$0.36/watt
by the end of 2017 a cost not thought possible but now conceivable with the help of new
innovations as well as automation".
In January 2015 the JRC, with the support of DG-ENER, organised a round table on "Scientific
Support to Europe´s Photovoltaic Manufacturing Industry" in Brussels". One outcome was that
a group of representatives from industry and research produced a position paper (30/03/2015)
on "the Future of the Photovoltaic Manufacturing Industry in Europe", which was reviewed by
JRC. According to this, support should focus on;
A. Upgrading existing crystalline silicon manufacturing capacities at Gigawatt
B. Establishing manufacturing facilities at Gigawatt size
C. Research and demonstration in a wider field of emerging technologies
D. Smart integration of PV systems in energy systems can reduce costs and facilitate the
handling of fluctuating electricity generation.
In particular the paper proposed a task force to develop an action plan on "Financing and
Business Opportunities". The full document is included here as Annex 1.
In the following we take a closer look at developments in PV manufacturing and provide
information and perspectives on factors which can influence its future development in Europe.
9
2. PV
I
NDUSTRY
2.1. Solar Cell Production Capacities
The JRC's PV status Report 2014 [1] has analysed global PV cell
1
production from 2005 to
2013, based on data collected from stock market reports of listed companies, market reports
and colleagues. While the global market has increased steadily to 40 GW in 2013 (Fig. 1), the
volume of EU cell production has decreased dramatically, falling from a peak of over 5 GW in
2010/11 to below 2 GW in 2013. Similarly its relative importance has dropped from about a
third of global production in 2008 to 5% in 2013. This contrasts with the rise of Asia
producers, in particular in China and Taiwan. For 2014 a further increase between 10% and
25% is expected by different consultancies.
Fig. 1:
World PV cell/module production from 2005 to 2013 (data source [1]: Photon International, PV
Activities in Japan 2014, PV News and JRC analysis).
1
Solar cell production capacities mean:
- In the case of wafer silicon based solar cells, only the cells,
- In the case of thin films, the complete integrated module ,
- Only those companies which actually produce the active circuit (solar cell) are included,
- Companies which purchase these circuits and make cells are not included.
0
5
10
15
20
25
30
35
40
45
2005 2006 2007 2008 2009 2010 2011 2012 2013
Annual Production [GW]
Year
Rest of World
United States
Malaysia
Japan
Europe
Taiwan
PR China
10
Of the other traditional PV technology leaders, the USA also experienced a decline in
manufacturing capacity from 2 GW in 2011 to about 1 GW in 2013.
Japanese production, on the other hand, has continued to expand, thanks to strong policy
measures and subsidies to promote renewables in the wake of the Fukushima nuclear
accident.
Amongst the 20 biggest cell/thin film PV manufacturers in 2013, only Hanwha Q CELLS (South
Korea, Germany, Malaysia and China) still has production facilities in Europe (however it has
subsequently announced that it is pulling out of Germany and shifting production to Malaysia
and Korea).
There is some uncertainty – the data for 2013 varies between 35 GW and 42 GW. This is due
to the highly competitive market environment, as well as the fact that some companies report
shipment figures, while others report sales and again others report production figures. In
addition, OEM manufacturing
2
increased significantly adding to the uncertainties in production
counting. 2013 was characterised by a shift of the main markets from Europe to Asia, mainly
due to increased demand in China and Japan.
The annual production capacity of cell manufacturing lines has typically increased by an order
of magnitude over the last decade, from tens to hundreds of megawatts per year. The first
GW-scale plants have been set-up in Asia and several others are in the pipeline.
There is a considerable international trade in cells, which can be transported reasonably cost
effectively and then assembled into modules in a process which involves lay-up and
interconnection of the cells, encapsulation together with a back sheet and front glass, and then
edge-sealing or framing.
2.2. Module Production
The above data refer to essentially cells, not modules i.e. the final assembled product (an
exception is for thin film products, but these make up only 10% of the market at present).
Cells are considered the most reliable basis for estimating production, whereas module data
are more difficult to establish reliably. Nonetheless various trade side and consultancies
monitor the largest module producers – Fig. 2 shows the top 15 in 2013 from the IHS
consultancy [7]. All are Asia-based with the exception of First Solar (USA). The top-ten all ship
more than 1 GW of module annually and represent about 45% of the total market. The
production itself is typically split over several sites, with individual lines of the order of
hundreds of MW. The scale however is increasing rapidly, as evidenced by SolarCity
announcement last year of a 1 GW fab in Buffalo, New York state, while more recently Hanwha
Q Cells confirmed capacity expansion plans that include the construction of its solar cell
production facilities in Korea with a nameplate capacity of 1.5GW.
Furthermore, although some manufacturers may differentiate products based on performance,
reliability, and appearance, the vast majority of manufacturers produce “off-the-shelf”
technology.
2
Original equipment manufacturer (OEM) is a term used when one company makes a part or subsystem
that is used in another company's end product
11
Fig. 2:
IHS consultancy: top 15 PV module producers in 2013 [7]. The IHS data for 2014 (no comparable
graph is available) show that Trina Solar took over the top spot from Yingli, with shipments in the region
of 3.6 GW. They put the total 2014 module market volume at 48 GW.
The absence of European companies reflects the severe shakeout which has occurred over the
last five years. Many were squeezed out of the market by the intense competition from low-
cost modules produced in China and other Asian counties. The ensuing anti-dumping cases in
Europe and the US are well-documented. Others lacked financial resources to compete in the
face of intense price competition, small or non-existent margins and a contracting domestic
market. As a results many have gone out of business or been sold to international investors.
JRC estimates that EU module production capacity is currently at approximately 2 GW.
Although a part of this is made up of smaller producers (typically < 100 MW) with niche
products (including BIPV), there nevertheless remain some significant European players in PV
manufacturing:
SolarWorld AG develops and produces solar technologies. The company produces
silicon wafers and manufactures solar cells and complete solar modules and
components used to generate solar energy. SolarWorld also recycles silicon and by-
products from solar wafer production. Current production capacity worldwide (Germany
and USA) is >1GW, including a 500 MW fab in Freiberg, Saxony.
Jabil Circuit (US electronics manufacturing conglomerate) has a module assembly
plant in Poland, reportedly with a capacity of around 1GW. This has been used by
ReneSola to provide modules into the EU that avoid import duties and limits to
shipment quotas from its manufacturing plants in China.
According to unconfirmed press reports, Recom AG (Athens, Greece) has announced
that it will begin solar photovoltaic (PV) module production in Europe and that its
manufacturing capacity in Italy is scheduled to exceed 500MW. The company has so
far manufactured modules solely in Malaysia
12
2.3. The Value Chain
Fig. 3 illustrates the overall PV value chain. PV modules make up slightly less than 50% of the
capital cost of utility scale systems, and approximately 40% for residential systems. Europe
still has a good position in other parts of the value chain. In 2011, the European share in
manufacturing equipment was well above 50% and the same holds true for operation and
maintenance (70%), construction (70%) installation (70%) inverter manufacturing (70%),
balance of plants (70%) and financial services (70%). However, if no revitalisation of the local
market takes place this will fade away (see also section 2.4 on jobs below).
Fig. 3
: Solar industry value (data source: GreenRhinoEnergy)
13
2.4. Jobs
Table 1 provides a detailed breakdown (JRC estimates building on original data from
Bloomberg New Energy Finance) of the jobs associated with the global PV market in 2011 and
2013, as well as the European share. Most of these are in two main areas: a) construction &
installation
3
and b) cell & module manufacturing. To calculate the jobs/MW, employment
figures and annual output stated in annual reports of public companies as well as private
communications with private ones were used. Jobs in the general supply chain such as mining,
glass manufacturing or supply of general equipment were not considered. Also those in
production equipment manufacturing industry and public R&D are not included.
The growth of the PV industry in Europe resulted in a peak of over 260 000 jobs in 2011.
More than 75% were related to operating and installing PV systems and almost all of these
jobs were local, contributing to the European gross national product.
The steep drop in new installations from 2011 to 2013 has more than halved these local jobs
and hence also their benefits to the local economy. In addition, the changes in the module and
inverter manufacturing sector has significant consequences. If these industries contract
further, the willingness for public R&D weakens and with it the ability of the equipment
manufacturing industry to innovate fast enough to stay competitive and to provide the next
generation of equipment needed for further cost reduction. However, these job effects are
much more difficult to quantify and as a result are often neglected in the overall assessment
of the sector.
3
"Construction" covers the labour need for large projects, whereas "installation" reflects the higher
labour intensity of decentralised smaller installations.
14
Table 1: PV Jobs in the EU in 2011and 2013 (JRC estimates building on original data from Bloomberg
New Energy Finance)
2011
MW
Jobs per MW
Total Jobs
European Share
% Jobs
Operation and maintenance 42,000
0.15
6,300
70 4,410
Construction 7,000
3.20
22,400
70 15,680
Installation 20,000
9.80
196,000
70 137,200
Polysilicon 31,000
0.75
23,250
25 5,810
Cell and module manufacturing
35,000
9.60
336,000
10 33,600
Inverters 27,000
1.50
40,500
60 24,300
Balance of plant 27,000
1.80
48,600
70 34,020
Project development 14,000
0.45
6,300
50 3,150
Financial services 27,000
0.10
2,700
70 1,890
TOTAL
682,050
38% 260,060
2013
MW
Jobs per MW
Total Jobs
European
Share
% Jobs
Operation and maintenance 100,000
0.15
15.000
57 7,350
Construction 18,000
3.20
57,600
20 11,520
Installation 20,000
8.90
178,000
30 53,400
Polysilicon 40,000
0.50
20,000
25 5,000
Cell and module manufacturing
42,000
8.00
336,000
5 16,800
Inverter 38,000
1.3
49,400
40 19,760
Balance of plant 38,000
1.5
55,500
30 16,650
Project development 36,000
0.35
7,000
35 2,450
Financial services 38,000
0.10
3,700
35 1,300
TOTAL
722,200
19% 134,230
15
2.5. Very Large-Scale Manufacturing (Giga-Fabs)
The PV industry is transforming into a mass-producing industry with its sights on multi-GW
production sites. Already in 2010 REC's Singapore solar facility was opened and produced 722
MW of solar panels in 2012. The total investment was €1.3bn. For the last few years the
leading manufacturers have been able to expand production capacity by re-branding existing
lines and effectively mopping up the excess capacity created in the rapid expansion of 2008-
2012, this phase may be ending. The move towards very large scale fabs on "green-field" sites
is seen as inevitable in order to create the economies of scale needed to further reduce down
prices. As mentioned earlier (section 2.2), in 2014 SolarCity announced of a 1 GW fab in
Buffalo, New York state.
This scale factor and the expertise needed to implement and operate such fabs successfully
need to be considered in any plans for new manufacturing units.
Several studies have been made on this subject. In 2013 the Baden-Würtemburg Ministry of
Environment, Climate and Energy commissioned a feasibility study from a consortium of
several Fraunhofer institutes [8]. Released in December 2013, it concluded that it is indeed
possible to produce innovative technology cost-effectively in Germany and Europe, with in a
gigawatt-scale factory for an investment of €1bn and a project module cost of €0.40/W. The
study included detailed analyses of the benefit of up-scaling product for two crystalline
technologies (PERC and BSK) and for CIGS. Fig. 4 shows an example of the results, indicating
the potential savings with respect to a hypothetical 500 MW baseline plant. Moving to 2 GW
leads to approximately an 8% reduction in module cost. In the analysis PERC was preferred as
having the lowest technological risk and hence WACC for the fab investment.
The NREL-MIT study [8] comparing US and Chinese production costs and released in 2013 also
considered scale-up from 500 MW to 2 GW in combination with technology innovations.
Together these effects produced predicted module cost reductions of over 33% (Figure 5).
Fig. 4: Scale of production effect on module cost for three technology options [8]. PERC = Passivated
Emitter Rear Cell; BSK is “beidseitig sammelnd und kontaktierbar” i.e. a double-sided emitter cell
concept with contacts on both surfaces, which also makes use of upgraded metallurgical grade silicon
(UMG-Si) with purity down to 99.999%; CIGS is a copper indium gallium di-selenide thin film device.
16
Fig. 5: The NREL-MIT study [9] shows potential impact of plant scale-up from 500 MW to 2 GW.on
production costs of advanced technology modules.in the US and China
2.6. Background to China's rise as Leading PV Supplier and Installer
In the middle of the last decade, China and Taiwan anticipated large growth rates in PV and
planned massive capacity expansions (Europe's most ambitious planning phase was in 2008,
but declined due to the effects of the financial crisis on the availability of funds to finance the
expansion plans).
Already during the China Development Forum 2003, it was highlighted that China’s primary
energy demand will reach 2.3 billion toe in 2020 or 253% of the 2000 consumption if
business-as-usual occurs. Renewable energy was identified as one of the pillars to ease this
pressure and presented a reason to press for additional Government policies supporting the
use of renewable energy sources.
In 2005 the Standing Committee of the National People’s Congress of China endorsed the
Renewable Energy Law, which went into effect in 2006. At the same time the government set
a target for renewable energy to contribute 10% of the country’s gross energy consumption by
2020, a huge increase from the then 1%. The 12th Five-Year-Plan was adopted 2011 and in
this plan renewable energy and PV electricity as a Key Technology was earmarked for USD 700
to 800 billion, intended to trigger USD 2,000 billion in investments for the six so-called
GreenTech technologies. In 2012, the National Energy Administration (NEA) released the
renewable energy five-year plan for 2011 to 2015. This called for renewable energy to supply
11.4% of the total energy mix by 2015. Renewable power capacity was planned to increase to
424 GW, with solar contributing 21 GW. In early 2015 the total was already at 33 GW. Indeed
2014 the National Development and Reform Commission (NDRC) approved an “Air Pollution
Prevention Plan”, which stipulates a 70 GW solar PV power generation capacity target by 2017.
It’s widely expected that installed capacity will exceed 100 GW by 2020. Even at this rate of
domestic installation growth, its production capacity is higher.
17
3. PV
M
ARKETS AND
P
RODUCTS
In considering the future development of PV manufacturing, clearly the projected markets need
to be carefully analysed in terms of size, location and product-breakdown.
3.1. Projected Global and European Markets
At global level, estimates for the growth of the PV market are positive. The IEA's baseline
scenario in its 2014 Medium-Term Renewable Energy Market Report [2] forecasts almost a
tripling of the PV installations until 2020, with approximately 40 GW being installed annually
worldwide. However, their predictions for the European market the annual growth rate flattens
out to approximately 6 GW (Table 2). The IEA Energy Technology Perspective hi-REn Scenario,
as reported in its 2014 Technology Roadmap Solar Photovoltaic Energy [9] (Table 3) the
European market maintains a similar volume, but its worldwide market share shrinks from
almost 60% in 2013 to less than 5% in 2050.
The projections [10] from the European Photovoltaic Industry Association (rebranded as
SolarPower Europe in May 2015) are more optimistic (Fig. 6). However the large range from
the low to high scenario (a factor of 2) underlines that, while PV electricity is increasingly
competitive, it remains a sector driven by policy at both national and EU levels. Changing
current contracting trend of the PV system installation market and enabling it to grow again
requires a major effort across the EU to ensure a stable investment environment and to reduce
soft-costs and administrative barriers. For this change to a more market driven environment,
the EU PV manufacturing sector needs to have a level playing field in financing compared to
international competitors.
The size and stability of the EU "home" market is also important for module
manufacturing/assembly location. The 2013 MIT-NREL study [8] puts transports costs (Asia to
US) at US$0.03 to 0.05/W i.e. between 5 and 10% of total cost. Hence an EU-based module
manufacturing model aiming predominantly for export is unlikely to be successful.
This message is reinforced by recent developments in the US and North America. The trade
press (PVTECH, 17 November 2014) reports that 10 module manufacturers have announced
new production plans for US locations, totalling just below 2GW in nameplate capacity. Future
demand requirements and the preliminary US anti-dumping ruling have a good part to play in
some of the decisions. However also European-based SolarWorld is part of this, and has
committed to expanding capacity by 530 MW after completion and ramp in 2015.
3.2. Market Innovation
The market for PV products can be broken down into 2 main categories:
Utility-scale systems: plants typically greater than 1 MW designed purely for supplying
the grid.
Rooftop systems: typically installed on or near buildings, with some part of the
consumption being used directly on site. This category covers a wide range of sizes,
from residential roofs with systems of a few kW to larger commercial roofs or
adjacent structures, with system sizes up to 1 MW.
18
Table 2: IEA analysis of PV installed and project capacity by region [2].
Table 3: IEA long-term projections for PV installed capacity in GW [10]
Fig. 6: EPIA EU market outlook for 2014-2018 [11]
19
EPIA's average projections for these two categories (Table 4) suggests that in Europe the
rooftop market will become substantially larger than that for utility scale plants, whereas
globally the situation is more balanced. The IEA takes a similar position regarding the
breakdown of the global market. It also stresses the importance of the commercial rooftop
sector.
Table 4: EPIA's predictions (low-high average) for PV market category breakdown in GW [11],
Europe Global
Rooftop
Utility scale
Rooftop
Utility scale
2014
4.3 4.2 25.2 18.2
2018
9.0 3.5 28.0 25.8
Both of these categories are currently addressed by the classic "module" product, with
rectangular shape and an area of approximately 1.5 m
2
. The power of each design varies
somewhat according to the efficiency of the PV technology used (polycrystalline silicon,
monocrystalline silicon, thin film etc.). However the product differentiation is based primarily
on price, and is expected to continue to be so in the medium term.
Moreover the existing market for large systems is dominated by a limited number of
companies who have developed "bankable" products and strong links to project developers,
ensuring competitive project financing. For residential installations a "know-brand" product is of
high importance to many local installers. Obtaining a significant market for a new product
means addressing these challenges.
At the utility scale, scope for product form innovation lies mainly in the module size. One route
is by introducing very large modules (>4 m2 area), and more cost effective, automated
mounting systems. In 2009 Applied Materials presented prototype 5.7 m2 modules, but the
concept wasn't fully developed commercially at the time. A medium-term strategy may be to
move away from modules to strip-type products e.g. mass produced on roll-to-roll devices
using thing film technology. Considerable European R&D is already being devoted to such
concepts.
For the rooftops category, there is potentially considerable scope for product innovation,
particularly if one includes building integrated PV (BIPV). Aesthetics and public acceptance may
also become important factors. BIPV has long been tipped as the next big growth sector for PV
products, but a series of factors including costs and lack of standards have hampered
progress. While the online Energy Focus (ENF
4
) register lists 40 European producers of
"innovative panel designs", covering roof tiles and shingles, PV thermal and transparent
products, manufacturing is still small scale. Some new initiatives include:
BOD Group, Via Solis and Baltic Solar Energy have set up the SoliTek manufacturing
facility in Vilnius, Lithuania to produce, amongst other products, customized module
designs and shapes for the roofing market.
The EU funded Construct-PV aims to develop customizable, efficient and low cost BIPV
for opaque surfaces of buildings.
4
http://www.enfsolar.com/directory/panel/innovativePanelDesign_pro
20
3.3. PV Technology Innovation and Cost Reduction
Over the past 10 years the PV industry has demonstrated its capacity drive up efficiency while
dramatically reducing costs. Detailed technology roadmaps are in place to guide further
developments for all technologies in terms of improved efficiency, reduced costs, increased
reliability and economic lifetime and reduced environmental footprint. At EU level there is the
European PV Technology Platform Strategic Research Agenda and the SET-Plan Solar Europe
Industrial Initiation Implementation Plan 2013-1015. Also the PV sector stakeholders have
produced a series of recommendations as part of the new SET-Plan Integrated Roadmap
process [4]. Similarly the IEA has included a series of targets in its Solar Photovoltaic Energy
Roadmap 2014 [10] – see Table 5.
Table 5: IEA technology recommendations from the IEA.
Concerning cost reduction, Fig. 7 shows the module price learning curve up to the end of 2013,
based on the analysis by Fraunhofer ISE [11] . While there are some indications that the prices
for crystalline silicon products stabilized in 2013-2014, Bloomberg New Energy Finance claims
that top tier Chinese manufacturers already have module production costs as low as USZ
0.48/W. Further, they assume a further cost reduction to USZ 0.33/W by 2020. The main cost
savings should come from cheaper polysilicon, thinner wafers with smaller kerf losses and
increased efficiency. Some additional cost reduction potential is envisaged for the non-silicon
cost components. Similarly, for thin film ambitious cost-cutting plans exist a recent article5
in Photovoltaics International claims that costs for CIGS modules can be reduced from a
current level of €0.44/W to €0.24/W. Overall, such estimates provide a welcome confirmation
of the potential of PV to become truly cost competitive in the electricity market, but they also
illustrate the challenges to becoming a viable manufacturer in this market.
5
Ilka Luck, Competitiveness of CIGS technology in the light of recent PV developments, - Part II,
Photovoltaics International, Q3, September 2014.
21
Fig. 7: PV module price learning curve for crystalline silicon and thing fim technologies, based on
cumulative production up to Q42013 (Fraunhofer Institute for Solar Energy Systems ISE, Photovoltaics
Report, Freiburg, 24 October 2014).
3.4. Financing environments move ahead
The financial conditions during the period of the European PV manufacturing contraction were
very damaging to the whole sector. While in Europe the financial sector and most banks were
impacted by the credit crunch as a result of the financial crisis, Chinese banks had vast
financial resources to be invested in order not to be exposed to inflation losses (see Table 6).
During 2013-14 the European financial environment has changed. There is significant credit
available now, and the capital cost has also become more favourable. Table 7 shows the
diminishing capital costs for market yields of projects with the closest time duration to the PV
manufacturing project. There is a general decreasing tendency in Europe, and in the most
concerned Member States this capital cost has declined to the fraction of the level of previous
year.
An even more significant development in the European financial framework conditions is that
renewable energy investment is expected to be one of the beneficiaries of a new infrastructure
fund worth €315bn unveiled by the European Commission president Jean-Claude Juncker in
late 2014. The new Commission and the European Investment Bank (EIB) could source €63bn
of the three-year fund with the rest leveraged from the private sector. An important aspect of
this funding is what leverage can be expected from the industry. As the plan calculates with
5/8 fold leverage, the decisive factor is the capacity to provide the substantial private part. As
many sectors (i.e. infrastructure) have expressed concerns over their ability to contribute these
high shares, the PV industry may be able to gain an advantage if they can stimulate the
required private investment.
22
Table 6: Chinese province funds to PV manufacturers (http://www.pv-tech.org/, 2013)
Table 7. Secondary market yields of government bonds with a remaining maturity close to
ten years. Source: ECB, https://www.ecb.europa.eu/stats/money/long/html/index.en.html
Countries April 2014 April 2015
Euro area
Belgium 2.16 0.42
Germany 1.46 0.12
Estonia
- -
Ireland 2.9 0.73
Greece 6.2 12
Spain 3.11 1.31
France 2.03 0.44
Italy 3.23 1.36
Cyprus 6 6
Latvia 2.8 0.42
Lithuania 3.26 0.58
Luxembourg 1.71 0.06
Malta 2.93 1.15
Netherlands 1.85 0.31
Austria 1.77 0.29
Portugal 3.82 1.87
Slovenia 3.52 1.06
Slovakia 2.47 1.18
Finland 1.84 0.27
Non-euro area
Bulgaria 3.44 2.36
Czech Republic 2 0.26
Denmark 1.57 0.25
Croatia 4.41 3.17
Hungary 5.56 3.28
Poland 4.1 2.37
Romania 5.15 3.25
Sweden 2.06 0.34
United Kingdom 2.3 1.65
23
4. E
XISTING
I
NITIATIVES TO
D
EVELOP
EU
PV
I
NDUSTRY
X-Gigawatt: Since 2013 Fraunhofer ISE has been actively prompting the so-called xGWp
concept. Its objectives are:
Establish a Gigawatt-size photovoltaic cell and module factory with next generation
technology in Europe, full capacity 2017/2018
Prove industrial production readiness with a 100 MW demonstration line
Promote long-term cooperation of leading companies and research institutes
The timelines are: 2014: form the company; 2015: 0,1 GWp demo line; 2018: 1 GWp fab
This project is to be based on beyond state-of-the-art technology:
Combining advanced Si-based cell with innovative contacting and other technologies in
automated, lean production processes in GW-scale
Achieving high efficiency cells (22 to 25%) at low prices
Favourable "characteristics" leading to low electricity generation costs
Significant further cost reduction through continuing innovation
The core members of the consortium include the Fraunhofer Institute for Solar Energy Systems
ISE (DE), the National Solar Energy Institute (INES) (FRA) and the Swiss Center for Electronics
and Microtechnology CSEM (SUI), as well as several (un-named) European manufacturing
companies.
Solliance is a consortium that brings together R&D expertise from ECN, TNO, Holst Centre,
Eindhoven University of Technology, imec and Forschungszentrum Jülich. It targets three
principal themes: thin film Si, Copper Indium Gallium Selenide (CIGS), Organic PV (OPV). Its
research stretches across the entire field, from fundamentals of materials science to
sophisticated production technologies. Industries involved include: Smit Ovens, Brabant
Development Corporation, Brainport Industries, Roth&Rau B.V., OM&T (Moser Baer subsidiary),
VDL/ETG, Umicore, Philips Innovation Services. It is actively searching industrial partners for
developing manufacturing capacity.
SOLARROK is a European cooperation format of regional photovoltaic in Germany, Austria,
Spain (Navarra), France (Rhône Alps), Slovenia, Lithuania, and the ELAt region (Dutch-Belgium-
German cross border region: Eindhoven, Leuven, Aachen). The project is carrying out a 3-year
workplan (1.12.2012 - 30.11.2015) to strengthen European innovation-driven PV industry and
research.
24
5. E
UROPEAN
R&D
L
ANDSCAPE
Europe has traditionally been a leader in R&D on PV across the whole value chain, but there is
a fear however that without being driven by significant European industry for manufacturing
and product development, this expertise will decline or move into more ambitious regions of
the world.
The latest JRC R&D Capacities Report [13] provides data for 2011 (Table 8), although in the
meantime the market situation has changed significantly.. As shown in Fig. 8, investments are
highly concentrated geographically, with Germany, France, Netherlands and Italy accounting
for 69% of the total. It is expected that these figures, particularly for corporate R&D, may have
decreased significantly with the shake-out in the manufacturing sector, the financial crisis and
the overall slow-down in the EU PV market.
It's nonetheless interesting to note that the stakeholder input to the 2014 SET-Plan integrated
road-map includes plans for advanced research, industrial research and development and for
market update activities totalling €3.24bn over the period 2015 to 2020 i.e. about €540 m
annually, a figure comparable to the 2011 total.
Table 8 PV R&D investments in Europe in 2011.
Public funding available through national mechanisms
364 million
Public funding available at European level*
39
Corporate R&D Investmen
t
548
Number of companies
identified in the corporate investment sample
236
Number of countries
represented in the corporate investment sample
19
Figure 8: Leading European countries in terms of total R&D investment in solar technologies
in 2011. EU funding is excluded. Data sources: IEA, JRC.
To assess the current situation, a "quick-look" bibliometric analysis was made of published
research papers over the last 5 years (2010-2014). This used SciVerse Scopus, an online
25
database owned by Elsevier, as the source
6
. In terms of differentiating technologies, the
analysis was confined to "crystalline silicon" and "thin film" categories.
Fig. 9 shows the number of publications annually on a global basis and for the EU-28. This is
considered a lagging indicator, i.e. the actual R&D will probably have been done 1 to 2 years
before due to the time taken for peer-review and publication process. Also the data would be
expected to reflect trends in academic rather than corporate research, since many industrial
companies don't publish results in the open literature. Nonetheless several points of interest
emerge:
The absolute number of publications is substantially higher (by a factor of 2 or more)
for the thin film category. Independent data for corporate R&D investment paints a
very different picture, with c-Si receiving the majority of funds.
For crystalline silicon materials there is distinct peak in 2011, with the data for
2012/13 coming back to the 2010 level. The papers with EU-based authors contributed
between a third and half of all publications, underlining the strength of Europe's
scientific base in this field.
In the thin film category, there appears to be a globally rising trend, but this tendency
is weaker for the EU, which has authors involved in approximately 25% of all
publications.
The second aspect examined is geographical distribution of the research paper authors. Fig. 10
shows the situation for both crystalline silicon and thin film. Author locations are shown as red
points, with the size of the point reflecting the number of papers. The red lines indicate links
between co-authors. For crystalline silicon, the three well-known regional centre of excellence
are evident: Baden Württemberg and Saxony in Germany and, the Benelux. In contrast for thin
film the distribution is much broader, with substantial activity in France, Italy, Spain, Sweden
and the UK, in addition to that in the Benelux and Germany.
Patent applications: EUROSTAT has data on patent applications to the European Patent Office
(EPO) at national level. They also report specifically for energy technologies, and among them,
photovoltaic (second technology for patents requests in EU28 in 2010). The most recent
complete data is for 2010 (provisional or estimated for 2011-2012). Highlights:
EU28 countries are responsible of 33 (464) of the total patent applications in
Photovoltaic energy in 2010 (1409). Top ranking by country: Japan (26%), US (22%),
Germany (15%)
Worldwide, PV patents represent 20.5% of the total in the classification "technologies
or applications for mitigation or adaptation to climate change".
European countries with more patent application in PV (in order): Germany, France,
Italy, Netherlands and UK.
6
Publication data is an incomplete indicator of scientific research (although a desirable output). But it is
a quantifiable source of data on the production of science. There are other indicators often used to
evaluate R&D such as: Gross domestic expenditure on R&D, number of researchers (per million
people), country’s share of world publications, educational programmes with focus on RE, number of
universities/degrees, etc.
26
a) Publications on crystalline silicon PV
b) Publications on thin film
Fig. 9: Analysis of published papers in the last 5 years (2010-2014) from the SciVerse Scopus
database.
27
a) Clustering of publications on crystalline silicon PV
b) Clustering of publications on thin film PV
Fig. 10: Geographical distribution of authors of PV research publications from the SciVerse Scopus
database. Author locations are shown as red points, with the size of the point reflecting the number of
papers. The red lines indicate links between co-authors.
28
6. S
UMMARY
&
C
ONCLUSIONS
The global market for photovoltaics, which was dominated by Europe in the last decade, has
rapidly changed into one dominated by Asia producers. This internationalisation is mainly due
to the rapid growth of PV manufacturers from China and Taiwan, as well as new market
entrants from companies located in India, Malaysia, the Philippines, Singapore, South Korea,
UAE, etc..
PV manufacturing is transforming into a mass-producing industry with its sights on multi-GW
production sites. This development is linked to increasing industry consolidation, which
presents a risk and an opportunity at the same time. For small and medium companies to
survive the price pressure of the very competitive commodity market, and to compensate for
the advantages enjoyed by big companies through the economies of scale that come with
large production volumes, they will have to specialise in niche markets offering products with
high value added or special solutions tailor-made for customers. The other possibility is to
offer technologically more advanced and cheaper solar cell concepts.
The PV market outlook is however bright, with a projected an annual EU market of 6 to 10 GW
and a global market of >50 GW. There are potentially huge business opportunities through the
value chain for European companies, taking advantage of its still strong R&D base, world-class
equipment suppliers as well as the continued presence of several large-scale manufacturers.
Based on the information gathered in this report, it is concluded that for a large-scale
manufacturing initiative to be economically viable and to have impact on the global market it
would need to aim for a capacity of several GW, with a short-term module cost price target of
below EUR 0.40/W. This reflects the reality that product differentiation is based primarily on
price, and is expected to continue to be so in the medium term. Furthermore it is essential to
involve partners with the expertise to successfully operate GW fabs.
Any initiative seeking substantial support at EU level support would need to involve several
European countries and regions and encompass a range of technologies (not just p-type
silicon) and innovative product forms.
Finally, while PV electricity is increasingly competitive, it remains a sector driven by policy at
both national and EU levels. The size and stable growth potential of the EU "home" market is
also important for module manufacturing/assembly location. To change the trend of the
currently contracting PV system installation market and enable it to grow again requires a
major effort across the EU to ensure a stable investment environment and to reduce soft-costs
and administrative barriers.
29
R
EFERENCES
1. PV Status Report 2014, A. Jäger-Waldau, EUR EN 26990, 2014
2. International Energy Agency, Medium-Term Renewable Energy Market Report 2014 - Market
Trends and Projections to 2020, ISBN 978-92-64-21821-5
3. Energy Union Package: A Framework Strategy for a Resilient Energy Union with a
Forward-Looking Climate Policy, COM(2015)80.
4. Photovoltaics: creating new opportunities for Europe, Position paper, European Photovoltaic
Technology Platform, Dec. 2013, http://www.eupvplatform.org/publications/other-
publications.html#c3161
5. SET -Plan: The Integrated Roadmap: Annex I: Research and innovation Part II – Competitive,
Efficient, Secure, Sustainable and Flexible Energy System, December 2014
6. Study on the competitiveness of the EU Renewable Energy Industry (both
products and services), ICF International, Final Report to DG Enterprise & Industry,
Directorate-General for Enterprise and Industry Directorate B – Sustainable Growth
and EU 2020, 2014, EUR 2014.5232 EN
7. HIS Pressroom, Wednesday, April 30, 2014 5:00 am EDT
http://press.ihs.com/press-release/design-supply-chain/leading-solar-module-suppliers-extend-
dominance-2013-chinese-still
8.
Studie zur Planung und Aufbau einer X-GW Fabrik zur Produktion
zukunftsweisender Photovoltaik Produkte in Deutschland, March 2014
http://www.ipa.fraunhofer.de/fileadmin/www.ipa.fhg.de/Publikationen/Studie_XGW-
Fabrik.pdf
9. Assessing the drivers of regional trends in solar photovoltaic manufacturing, Alan C.
Goodrich, Douglas M. Powell, Ted L. James, Michael Woodhouse and Tonio Buonassisi, Energy &
Environmental Science, 2013, 6, 2811
10 International Energy Agency, Technology Roadmap – Solar Photovoltaic Energy, 2014
edition
11 Fraunhofer Institute for Solar Energy Systems ISE, Photovoltaics Report, Freiburg, 24
October 2014, http://www.ise.fraunhofer.de/de/downloads/pdf-files/aktuelles/photovoltaics-
report-in-englischer-sprache.pdf
12 EPIA, Global Market Outlook for Photovoltaics 2014-2018
13 T.D. Corsatea, A.Fiorini, A. Georgakaki, B.N. Lepsa, Capacity Mapping: R&D investment in
SET-Plan technologies - Reference year 2011, EUR 27184 EN, 2015
30
Annex 1
Position Paper on the Future of the Photovoltaic
Manufacturing Industry in Europe
Prepared by:
Gaëtan Masson, European Photovoltaic Technology Platform
Milan Nitzschke , SolarWorld AG
Ruggero Schleicher-Tappeser, European Gigawatt Fab (xGWp)
27 March 2015
Position Paper on the
Future of the Photovoltaic Manufacturing Industry in Europe
1. Background: Current Situation and Outlook for the PV Industry
This document has been prepared by:
Gaëtan Masson European Photovoltaic Technology Platform
Milan Nitzschke SolarWorld AG
Ruggero Schleicher-Tappeser European Gigawatt Fab (xGWp)
20 March 2015
Context and Objectives of the present Position Paper
This position paper proposes concrete policy actions with a view to ensuring that the EU PV
industry will play a leading role in making the EU number one in renewable energies as technology
producer and not just user of technologies produced elsewhere. The concrete proposals in this
document contribute to the implementation of the Energy Union Strategy and could be considered
in the development of the forthcoming Renewable Energy Package and of the initiative on EU global
technology and innovation leadership on energy and climate to boost growth and jobs. The paper
was authored by a group of EU PV industry representatives, at the initiative of the JRC, and as a
follow up to the Round Table “Scientific Support to Europe's Photovoltaic Manufacturing Industry”
held on 27 January 2015, organised by DG JRC in collaboration with DG ENER and DG GROW.
The Era of PV has Started Globally
With around 40 GW installed in 2014 (compared with 7 GW in 2009, only five years before),
the global PV market continues to grow, with China, Japan, the USA taking the lead. Behind these
three countries, dozens of markets are growing. In contrast, only around 7 GW have been installed
in EU member states in 2014, down from 22 GW in 2011.
Today’s PV system price level has reached a certain level of competitiveness in several
applications and will become competitive in an increasing number of market segments and
countries in the coming years. Long term prospects are even brighter: in September 2014 the
International Energy Agency, which has traditionally been conservative on the prospects for
renewables, published a PV roadmap until 2050 that envisages that PV could contribute to more
than 15% of the world electricity demand. In order to reach such levels, PV markets will have to be
multiplied by a factor 5 by 2025. The EU has set the target of 27% renewable energy in 2030, which
requires raising the share of renewable electricity from 23% today to at least 45% in 2030
1
.
Assuming that 40% of the additional capacity would come from PV this requires to install at least
220 GWp
2
of PV capacity in Europe by 2030.
1
Staff working document accompanying the Communication of the Commission concerning the Paris
protocol (COM(2015)81 final)
2
1 Gigawatt (GW) roughly corresponds to the power of a large conventional (coal or nuclear) power
plant. As electricity is generated by PV only when the sun shines, the subscript “peak” is added.
Depending on the location, in Europe roughly 7 GWp solar generation capacity is needed to producing
Energy Union PV Manufacturing in Europe
2/6
However, at the moment of this historical breakthrough, Europe’s PV manufacturing
industry has shrunk dramatically, and Europe is at risk of losing the possibility to play a role in the
giant PV market of tomorrow.
Larger, Vertically Integrated Actors
Asian and especially Chinese PV companies have succeeded in conquering global markets.
One of the main factors was the strong support from Chinese authorities in different forms to build
up manufacturing capacities bigger than worldwide demand. Financial resources and economies of
scale resulting from this growth together with accelerated vertical integration of major players limit
risks and costs. An increasing number of companies combines not only all stages of manufacturing
(from wafers to modules), but also the development and construction of power generation
systems. Such vertical integration allows for steady revenues, easier access to cheap capital and
more continuous utilization of manufacturing capacities.
3
Overcapacities are Decreasing Fast with Market Expansion
Massive investment in recent years led to global overcapacities and a fast consolidation of the
industry, which was particularly detrimental to small and medium-size European companies that
left the business, were acquired or simply disappeared. Meanwhile, the exit of less competitive
production lines, as well as continuously growing global markets, have considerably reduced
overcapacities, and investment in new capacities has re-started. While overcapacities may not
disappear for standard modules, high efficiency high quality modules meet a strong and increasing
demand allowing for higher margins. A European strategy should therefore focus on this sector.
However, production of photovoltaic devices will probably remain a highly innovative cyclical
business just as the chip industry creating strong players is therefore important.
Crystalline Silicon Dominates
Crystalline silicon is by far the dominant technology after having achieved stronger cost
reductions than competing technologies. In order to continue lowering costs, it is expected that
several technologies could progress in parallel and get into healthy competition about cell efficiency
and costs. EU industry is leading in developing and applying incremental approaches, among them
PERC
4
and similar technologies. Heterojunction
5
as more radically innovating technology, which
requires more new equipment for enabling larger innovation steps, promises fast progress and low
costs. Depending on their legacy, major producers adopt different strategies but will all have to
invest into research and equipment. A new wave of investments will thoroughly change the PV
the same amount of electricity as 1GW of a nearly continuously running power plant. The production
capacities of cell and module factories are measured in MWp or GWp per year (GWp/a). A “Gigawatt
Factory” therefore has a yearly output of photovoltaic devices totaling 1 GWp.
3
European PV manufacturers were among the first ones to develop in this direction, but their crisis
prevented faster progress.
4
PERC (passivated rear-emitter cell) technologies improve the electrical properties of crystalline silicon
cell and thereby also the efficiency.
5
Heterojunction technology combines crystalline silicon with a thin film of amorphous silicon and allows
for cell efficiencies up to 25%.
Energy Union PV Manufacturing in Europe
3/6
industry. Europe has the chance to play a role again if it makes smart use of its still existing
technological leadership
6
.
Pure thin-film and organic PV technologies may become very important at a later stage. It is
important to support their further development.
2. Main Challenges & Strategy for a Competitive PV industry in Europe
Cost Competitive Manufacturing in Europe
While the discussion on creating a level playing field, on capital costs and public support is
going on, the evolution of exchange rates is presently playing in favor of Europe. Highly automated
factories in Europe, financed at a cost comparable to the one granted to Asian competitors or with
a similar level of support as in America, shall be able to deliver competitive PV products.
Maintain a Vibrant Ecosystem for the Entire PV Value Chain in Europe
European research institutes and equipment manufacturers are still global technology
leaders. But the loss of their domestic European customer base seriously jeopardizes this position
and their financing. If Europe wants to play a role in the future of photovoltaics, one of the main
pillars of future energy supply, it needs to maintain a vital ecosystem along the whole value chain
including R&D labs, equipment manufacturers and manufacturing companies. Moreover, industrial
deployment of PV manufacturing and market presence requires considerable size and capital to be
competitive at a global level: Having large players in Europe mastering subsequent technology
generations is a precondition for maintaining this ecosystem, investing in new technology
generations, re-creating employment in the PV sector, re-conquering a strong position on global
markets and ensuring a lasting European capacity in this key technology for the transition to
sustainable energy supply systems.
The need for a Coherent European Strategy
While new global PV market leaders from China, Japan, South Korea, Taiwan and the US
benefit from official support or the support of large industrial groups, European manufacturers and
initiatives are confronted with contradictory public policies, the hostility of large parts of the
conventional energy sector and skeptical private investors. Overcoming these obstacles urgently
requires a coherent strategy from European institutions and member states combining two
dimensions: to guarantee a steadily growing PV market and to support the revitalization of the EU
PV industry with a coordinated and focused industry policy.
Support New and Existing Players
This document proposes to focus on a very limited number of strong European players with
different strategies, aiming at establishing a next generation PV technology with cell efficiencies
7
of
6
EU Research Framework programme FP7 funds for PV amounted to 7% of the budget for nuclear
fission and fusion, and to only about 7% of the budget for non-nuclear energy research. EU researchers
and equipment producers have also benefitted from industry research and national budgets and are still
able to offer cutting-edge technologies. However with the decline of the European PV industry this may
not remain so.
7
The percentage of the incoming light which is transformed into electricity by the photovoltaic device.
Energy Union PV Manufacturing in Europe
4/6
24% and more, very high quality, high innovation rates, large scale manufacturing and a certain
extent of vertical integration for reaching and maintaining a globally competitive position.
Since the global market for very high efficiency cells is still small but rapidly expanding,
upgrading and expanding capacities for high efficiency PERC technology and building up new
capacities in Europe with a technology based on big-leap innovation such as Heterojunction, might
be achieved rapidly without jeopardizing the efforts of existing European manufacturers to
compete on global markets with incremental improvements of mature technologies.
A two-fold European strategy capitalizing on both existing industrial capacities and
advanced technology potentials should on one hand support existing players in upgrading their
production capacities with an incremental innovation approach, and on the other hand to support
the creation of a new major European player aiming at a long-term global growth strategy with a
direct jump to innovative ultra-high-efficiency technologies, involving more risks. Important Europe-
based and globally active potential clients have stated a strong interest in such products at
competitive prices. Having European players in the global top five PV manufacturers should be the
aim of a coherent European strategy.
3. Main Actions Needed from the Commission and the Member States
Creating Reliable Market Conditions for PV Development in Europe
The European Photovoltaic Industry needs a reliable market outlook for PV in Europe. The
confidence of investors in Europe has been compromised by unsteady and contradictory policies:
rapid changes in the PV market environment, sudden heavy reductions of feed-in-tariffs, retroactive
changes of investment conditions, the hesitation of many member states to allow for even small PV
markets, all this resulting in a strong decline of sales in Europe by more than 60% in only 3 years
despite falling prices.
Moreover, new regulations in several member states have restricted the possibility to self-
consume PV electricity that is considered globally as one of the most promising ways to continue
developing the PV market. In that respect, taxes on self-consumption should be prevented. Instead,
market design for integrating fluctuating renewables into flexible electricity markets should
encourage optimal use of PV electricity generation at all scales, and not oppose it directly or
indirectly through inappropriate regulations.
Ensuring a steady market growth for small and large PV systems, for both self-supply and
utility use in all EU member states, creating demand for high quality and long-lasting solar systems
and obtaining a fair and sustainable market is most important for achieving RE and climate change
targets in combination with growing an own strong PV industry. The dramatically reduced cost of
PV systems allows us to do this with considerable economic, ecological and employment benefits
for the European economies while achieving more energy independence. The European Union
should therefore commit to removing existing obstacles and to develop and encourage appropriate
mechanisms at different levels. More harmonization and coordination between member states may
be useful in a European Energy Union in which PV is one of the main energy supply pillars
however, a certain degree of competition between national and regional systems has accelerated
the development of appropriate mechanisms in the last two decades.
Energy Union PV Manufacturing in Europe
5/6
In order to cover a consistent share (50%) of a European PV market of 10 to 20 GWp per
year with European production, determined efforts are necessary for building a competitive local
industry.
Focusing Support on Core Areas
Focusing of efforts on key areas is essential for rapid success. The main danger lies in a loss of
manufacturing in Europe for important “Key Enabling Technologies” like PV wafer, cells and
modules.
Without a competitive production hub, Europe will also lose its world renowned industrial
competence in production machinery, material supply and ultimately its research, development and
innovation competence in this area. Moreover, the embedding of photovoltaic devices in energy
supply systems is very important and Europe has specific competence in this field. Support should
focus on the following fields:
A. Upgrading existing crystalline silicon manufacturing capacities at Gigawatt scale with
incremental innovation. Especially PERC and PERL technologies can help to improve cell
efficiencies, to maintain technological leadership in the field of the dominating c-Si market
segment, and to improve profitability for existing industries.
B. Establishing manufacturing facilities at Gigawatt size with big-leap innovation technology,
based on successful demonstration lines. Heterojunction technologies combining crystalline
and thin-film silicon are worldwide dominating the efforts for achieving disruptive efficiency
improvements. Europe has cutting-edge competencies and equipment in this field.
C. Research and demonstration in a wider field of emerging technologies. CIGS, CPV,
Perovskites etc. could become important further down the road and Europe needs to
prepare in time, supporting existing actors.
D. Smart integration of PV systems in energy systems can reduce costs and facilitate the
handling of fluctuating electricity generation. Different PV technologies offer different
opportunities for mechanical and electrical integration. PV manufacturers therefore need to
be involved in system design (including storage).
The time window for this unique opportunity is narrow: decisions for large-scale investment must
be taken before the end of this year.
Support Mechanisms in a Competitive Environment
The European PV industry is facing heavy competition from other continents where large PV
companies have been established with substantial public support. Europe still has cutting edge
technologies. However, for living up to their potential, European PV manufacturing companies need
targeted support for overcoming initial difficulties linked to the lack of investor confidence and the
lack of sufficient size. Reducing risks is essential in this phase. Two kinds of support are therefore
most important:
Facilitated loans, loan guarantees and risk capital (VC) in order to encourage investors,
and enable the industry to invest and reach sufficient scale
Focused public support for research, development and industry-scale demonstration
PV needs sufficient funds in the support mechanisms for research, development and
demonstration. Industry-scale demonstration lines for advanced manufacturing are essential for
Energy Union PV Manufacturing in Europe
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transferring research results into business practice. Procedures need to be streamlined in order to
avoid loss of time and complex negotiations with co-funding member states.
A special task force should coordinate the opportunities of financial support at European,
national and regional levels in order to speed up procedures and negotiations. Moreover, a
benchmark analysis on how industrial production in the PV sector is supported in other continents
should be carried out as a basis for developing adequate support in Europe.
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European Commission
JRC 94724 – Joint Research Centre – Institute for Energy and Transport
Title: Perspectives on future large-scale manufacturing of PV in Europe
Authors: Heinz Ossenbrink, Arnulf Jäger Waldau, Nigel Taylor, Irene Pinedo Pascua, Sandor Szabó
2015 – 39 pp. – 21.0 x 29.7 cm
JRC Mission
As the Commission’s
in-house science service,
the Joint Research Centre’s
mission is to provide EU
policies with independent,
evidence-based scientific
and technical support
throughout the whole
policy cycle.
Working in close
cooperation with policy
Directorates-General,
the JRC addresses key
societal challenges while
stimulating innovation
through developing
new methods, tools
and standards, and sharing
its know-how with
the Member States,
the scientific community
and international partners.
Serving society
Stimulating innovation
Supporting legislation
JRC 94724
... The value chain and the involvement of the various stakeholders' activities are presented in Table (2). The potential jobs added annually (jobs/MW) may be estimated by depending on the statistics of the annual report of the European Commission Joint Research Centre regarding PV Industry in EU countries, as shown in table (3) (Ossenbrink et al., 2015). Table (3): Potential jobs added annually by the PV value chain (Ossenbrink, et al., 2015). ...
... The potential jobs added annually (jobs/MW) may be estimated by depending on the statistics of the annual report of the European Commission Joint Research Centre regarding PV Industry in EU countries, as shown in table (3) (Ossenbrink et al., 2015). Table (3): Potential jobs added annually by the PV value chain (Ossenbrink, et al., 2015). ...
Preprint
Full-text available
The present paper draws attention to the importance of localizing the value chain of photovoltaic solar energy in Saudi Arabia based on the country’s vision for 2030 to meet the expected increase in energy demand. This paper describes various obstacles and enablers and shows the critical factors that restrain the development of the value chain of photovoltaic solar energy. In this paper, different phases of upstream and downstream activities of the photovoltaic industry value chain related to the current situation in Saudi Arabia were examined and analyzed. This paper further examines the capabilities of the local content of photovoltaic solar energy to determine the scenarios that can be adopted to enhance the photovoltaic solar energy industry. This paper analyzes the expected significant positive impact of localizing the value chain of the photovoltaic solar energy industry on the socioeconomic development, job creation, and technology transfer in Saudi Arabia. The paper concludes with recommendations to facilitate the expansion of the photovoltaic solar industry in Saudi Arabia.
... The NTP's initiatives is targeting to create significant number of jobs (145,000) in the industrial sector by 2020. The value chain and the involvement of the various stakeholder's activities are presented inTable (2).2019 44(7 ) 36The Potential jobs added annually may be estimated by (jobs/MW) depending on the statistics of annual report of European Commission Joint Research Centre regarding PV Industry in EU countries as shown in table (3)(Ossenbrink, et al., 2015). ...
... ): Potential jobs added annually by PV value chain(Ossenbrink, et al., 2015).Financial services Project develo pment BOS Inverters Cell and module industry Polysilicon Installation Construction O & M Activity 0.1 0.45 1.8 1.5 9.6 0.75 9.8 3.2 0.15 Job/MW ...
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The present research focuses attention on the importance of localization of solar PV value chain in the Saudi Arabia based on its 2030 vision to address the expected growing energy demand. The research depicts various barriers and enablers and highlights critical factors that deleterious to the development of PV value chain. The research further investigates the requirements of solar PV local content to assist in understanding what possible targets that can address the current situation of solar PV industry. In accordance to this, different phases of solar PV value chain including upstream and downstream activities related to the situation in Saudi Arabia have been investigated. The present research is anticipated to have substantial positive impacts in terms of socioeconomic development, employment generation, and environmental benefits. The research concludes with recommendations and strategic plans to be performed to ease expansion of solar PV industry in the country.
... This is useful to detect the current main barriers, bottlenecks and needs to reduce extra-costs, towards the definition of a digital PV process. This has been done thanks to the activities carried out within the SuperPV project and on the basis of literature review (e.g., [10][11][12]). A summary of the reference PV process and the main stages is shown in Figure 1. ...
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Digitalization is providing advantages to all sectors around the world and it can be of relevance also for the photovoltaic (PV) sector. As an example, the current value chain of the European PV sector is often characterized by analogue and fragmented processes that should be overcame to support greater PV deployment. The adoption of a more open and collaborative digital-based approach characterized by data-sharing among different stakeholders and more integrated information thread from the design till O&M can provide direct benefits in optimizing the PV process, increasing performances, and reducing of costs. Therefore, a novel PV Information Management (PIM) approach has been drawn within the European H2020 project “SuperPV”. In accordance with PIM objectives, a workflow for seamlessly transferring data along main PV work-stages has been developed, as well as new digital features to specifically address collaborative approach in the PV sector such as: (i) advanced functionalities introduced in the existing BIMSolar ® software for improving the simultaneous design, performance simulation and cost assessment of medium and large PV systems, (ii) a proof-of-concept for aggregating all relevant information into a Digital Twin platform aimed at setting the ground for post-construction management and lifecycle assessment of the whole PV system.
... Later on, many Chinese solar companies expanded their productions in other Southeast Asian countries, especially Malaysia, due to the anti-dumping duties and countervailing investigations from the US and EU [9]. The share of Malaysia's PV production has been increasing significantly since 2009 [10]. However, PV technology deployment in Malaysia remains marginal compared with fossil fuels in terms of the total electricity production. ...
Chapter
Initial policy-induced market growth in Europe since the 1990s promoted not only mass-production industry, but also process innovation particularly in Asia. Currently, Asia accounts for about 85% of the global PV module manufacturing capacity, and this region has the highest PV market growth. A comparative review in four countries—China, Malaysia, Thailand, and India—is executed to identify relationships and emerging themes. One outstanding theme is policy shifting from governance by rules to governance by goals, and the increasing role of private sector in PV market. PV system installation trend also shifts from centralised grid-connected system to distributed system. Despite the positive technological leapfrogging, merely technological exploitation may be unable to secure sustainable futures. Thus, the innovation catch-up strategies play a crucial role and should include technological exploration. Detailed analysis and discussion based on Alexander Gerschenkron’s viewpoint are addressed, together with policy implications.
... The production of solar energy in large-scale is one of the most relevant technological challenges of recent years because the search for clean and renewable energy sources is increasingly becoming a global necessity (Khan and Arsalan, 2016;Lewis, 2007). In this context, the area of photovoltaics stands as one achievable option for direct light-toelectricity conversion technology Ossenbrink et al., 2015). Research into photovoltaic devices has acquired a new skyline with the emergence of new semiconductor materials and thin film technologies, lowering processing costs and paving the way for flexible devices of large areas (Kim et al., 2015;Zhang et al., 2018). ...
Article
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... In 2015, the cumulative installed capacity of PV panels exceeded 200 GW by the end of the year, with an increase in installed capacity that was 25% higher than in 2014 [1]. Even though other technologies have been introduced, such as thin-film PV, crystalline Silicon (c-Si) modules still dominate the PV market with around 90% of the installed capacity in 2015 [2,5,23]. In recent years the cost of c-Si PV panel production has substantially dropped in consequence of technological improvements combined with low material costs for Silicon [1,[3][4][5][6]. ...
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Over the last decade the environmental impact of photovoltaic (PV) panels has extensively been explored, often using a Life Cycle Assessment (LCA) methodology. However, the manufacturing data in reference databases are typically outdated and the end-of-life treatment is mostly omitted from the scope of these studies. The objective of the current study is to inform decision-makers about potential environmental impact reductions, mostly through dematerialization of the manufacturing phase and secondary material recovery at end-of-life. The results show how taking into account eco-design aspects in the manufacturing stage and a well-designed end-of-life treatment system can further contribute to lowering the environmental impact of PV panels and thus renewable energy production.
... TIM's capabilities include monitoring technological development trends, e.g. by identifying relevant keywords and lead players by country, region and sector, and by comparing them with other players and other technologies. Such analysis can be valuable to researchers and research managers who need to better understand opportunities and challenges in the research landscape [5] [6] [7] [8]. ...
Technical Report
Full-text available
The Joint Research Centre (JRC) is currently developing a monitoring system for tracking the evolution of established and emerging technologies (Tools for Innovation Monitoring, TIM). The editor tool developed is based on semantic analysis, powerful data mining and visualization of complex data sets and holds the promise to complement expert knowledge by identifying emerging trends within a technology. Within this context, this report provides guidance and illustrates possible ways of applying bibliometric analysis to research-for-policy questions on specific energy technologies.
Article
Full-text available
The present paper draws attention to the importance of localizing the value chain of photovoltaic solar energy in Saudi Arabia based on the country’s vision for 2030 to meet the expected increase in energy demand. This paper describes various obstacles and enablers and shows the critical factors that restrain the development of the value chain of photovoltaic solar energy. In this paper, different phases of upstream and downstream activities of the photovoltaic industry value chain related to the current situation in Saudi Arabia were examined and analyzed. This paper further examines the capabilities of the local content of photovoltaic solar energy to determine the scenarios that can be adopted to enhance the photovoltaic solar energy industry. This paper analyzes the expected significant positive impact of localizing the value chain of the photovoltaic solar energy industry on the socioeconomic development, job creation, and technology transfer in Saudi Arabia. The paper concludes with recommendations to facilitate the expansion of the photovoltaic solar industry in Saudi Arabia. Graphic abstract
Article
The photovoltaic (PV) industry has grown rapidly as a source of energy and economic activity. Since 2008, the average manufacturer-sale price of PV modules has declined by over a factor of two, coinciding with a significant increase in the scale of manufacturing in China. Using a bottom-up model for wafer-based silicon PV, we examine both historical and future factory-location decisions from the perspective of a multinational corporation. Our model calculates the cost of PV manufacturing with process step resolution, while considering the impact of corporate financing and operations with a calculation of the minimum selling price that provides an adequate rate of return. We quantify the conditions of China's historical PV price advantage, examine if these conditions can be reproduced elsewhere, and evaluate the role of innovative technology in altering regional competitive advantage. We find that the historical price advantage of a China-based factory relative to a U.S.-based factory is not driven by country-specific advantages, but instead by scale and supply-chain development. Looking forward, we calculate that technology innovations may result in effectively equivalent minimum sustainable manufacturing prices for the two locations. In this long-run scenario, the relative share of module shipping costs, as well as other factors, may promote regionalization of module-manufacturing operations to cost-effectively address local market demand. Our findings highlight the role of innovation, importance of manufacturing scale, and opportunity for global collaboration to increase the installed capacity of PV worldwide.
5:00 am EDT http://press.ihs.com/press-release/design-supply-chain/leading-solar-module-suppliers-extend- dominance-2013-chinese-still
  • His Pressroom
HIS Pressroom, Wednesday, April 30, 2014 5:00 am EDT http://press.ihs.com/press-release/design-supply-chain/leading-solar-module-suppliers-extend- dominance-2013-chinese-still
Capacity Mapping: R&D investment in SET-Plan technologies -Reference year 2011
  • D Corsatea
  • A Fiorini
  • A Georgakaki
  • B N Lepsa
D. Corsatea, A.Fiorini, A. Georgakaki, B.N. Lepsa, Capacity Mapping: R&D investment in SET-Plan technologies -Reference year 2011, EUR 27184 EN, 2015
Energy Union Package: A Framework Strategy for a Resilient Energy Union with a Forward-Looking Climate Policy
Energy Union Package: A Framework Strategy for a Resilient Energy Union with a Forward-Looking Climate Policy, COM(2015)80.
The Integrated Roadmap: Annex I: Research and innovation Part II – Competitive, Efficient, Secure, Sustainable and Flexible Energy System
  • Set-Plan
SET -Plan: The Integrated Roadmap: Annex I: Research and innovation Part II – Competitive, Efficient, Secure, Sustainable and Flexible Energy System, December 2014
  • Douglas M Goodrich
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  • Tonio Woodhouse
  • Buonassisi
Goodrich, Douglas M. Powell, Ted L. James, Michael Woodhouse and Tonio Buonassisi, Energy & Environmental Science, 2013, 6, 2811