PES Solar Industry Report 2009/2010

P O W E R & E N E R G Y S O L U T I O N S

03

04-08

09

10

ContentsIntroduction

PES Solar Industry Report

PES Readership Results

Methodology

POWER AND ENERGY SOLUTIONS | SOLAR SURVEY 3

Readers across Europe, Asia, America and beyond responded to give their views on the future of solar power. Quizzed on issues related to policy, costs, regulation, targets, potential markets, and more, the responses reveal much about the industry perceptions of the future across more than 60 countries.

This report is the first in a series, which is set to be the industry’s barometer going forward; an essential document for all executives and policymakers.

We’re certain that it will provide indispensible insight and analysis and, when coupled with the rigorous industry scrutiny regularly presented by PES magazine, will constitute a 360 degree update that no solar power professional can afford to do without.

Enjoy the report.

Simeon de la TorreEditor, Power and Energy Solutions

Welcome to this, Power and Energy Solutions’ inaugural Solar Industry Report. We polled thousands of our readers in the closing months of 2009 and asked them where they believe solar (including photovoltaic) power is heading, and where the strengths, weaknesses, opportunities and threats lie.

4 POWER AND ENERGY SOLUTIONS | SOLAR SURVEY

Over the next 12 months, how do you think the industry as a whole will progress?

Given the global economic downturn, there’s little doubt that the last 12 months have been turbulent for almost every industry, and the solar sector is no different. Solar panel prices dropped 30% last year alone due to an increase in output and a drop in orders because of the recession. China has underpinned its solar industry with a massive solar domestic programme which will keep prices falling, and there are large-scale solar plans in the US and India too. And while falling prices are a ‘double-edged sword’, they’re bringing us ever closer to the holy grail of grid parity. These encouraging signs are refl ected in our fi ndings (left).

Which sector(s) of the industry do you feel will enjoy the biggest growth over the next fi ve years?

Manufacturing has long been trumpeted as the sector that will enjoy the fruits of the solar power revolution, and demand for cell and module facilities are directly correlated to the demand for solar power generation. Manufacturers in these industries are predicting strong growth in 2010 and recognising areas where performance and output can be improved. It’s also interesting to note that various ancillary industries such as MES and software systems bear on the results here.

Increase modestly

Increase considerably

Remain the same

Over the next 12 months, how do you think the industry as a whole will progress?

Decrease modestly

Decrease modestly

60%

20%

13%

7%

<1%

Cell production

Module production

Thin Film

Materials

Which sector(s) of the industry do you feel will enjoy the biggest growth over the next five years?

MES & Software systems

Installations

Other

Fabs & Facilities

52%

14%

11%

10%

6%

<1%

<1%

7%

POWER AND ENERGY SOLUTIONS | SOLAR SURVEY 5

What is your opinion on government subsidies for your industry?

In early 2009, solar cell manufacturers worldwide were affected by the sudden reduction of a massive government subsidy in Spain. The result was a global slump in demand and prices, with Europe being hit hardest. It was thought that low-cost producers in China and Taiwan would take market share away from higher-cost German manufacturers, and this fear was compounded when China launched subsidies of 50 per cent on large-scale solar projects under a “Golden Sun” initiative. The subsidy will rise to 70 per cent for solar power systems in remote areas that are not currently connected to the grid.

While 40% of our readers worldwide claimed that subsidies were at the right level, over a third would nevertheless like to see an increase.

How happy are you with the current levels of regulation?

A decade ago, the idea of making the use of solar energy compulsory sounded radical and politically unrealistic in most parts of the world. However, solar obligations have now been adopted or are being discussed in a number of countries, regions and local authorities in Europe and beyond. There are concrete plans to “speed up the widespread adoption in all Member States of best practice regulations making it compulsory… for a minimum proportion of the heating requirement to be met from renewable sources.” Solar power is the easiest way of achieving this in the short term, and facilitating regulations in Europe – if not the world – are fi nally being instituted.

Are our respondents happy with the current levels of regulation? It’s a fairly even split…

They are at the right level

They need to increase

They should decrease

What is your opinion on government subsidies for your industry?

40%

33%

27%

Neither happy nor unhappy

Moderately happy

Very unhappy

How happy are you with the current levels of regulation?

Moderately unhappy

Very happy

47%

26%

20%

7%

<1%

6 POWER AND ENERGY SOLUTIONS | SOLAR SURVEY

Do you believe that we will meet the targets for renewables set by Europe and the UN?

European leaders are indicative of the global renewables effort, having signed up in March 2007 to a binding EU-wide target to source 20% of their energy needs from renewables, including biomass, hydro, wind and solar power, by 2020. To meet this objective, EU leaders agreed a new directive on promoting renewable energies, which set individual targets for each Member State. A new EU directive on renewable energies, agreed in December 2008, requires each Member State to increase its share of renewable energies in the bloc’s energy mix to raise the overall share from 8.5% today to 20% by 2020. A 10% share of ‘green fuels’ in transport is also included within the overall EU target.

To achieve the objective, every nation in the 27-member bloc is required to increase its share of renewables by 5.5% from 2005 levels, with the remaining increase calculated on the basis of per capita gross domestic product (GDP). But are we set to deliver on these targets?

Which continent currently presents the most opportunities for your business?

The photovoltaic industry has boomed over the past decade, growing at a rate of over 35% per year. Concerned about climate change and energy independence, governments have been implementing incentives that promote the adoption of solar energy in order to shift consumption away from fossil fuels for the generation of electricity.

Following changeable markets in 2009 caused by the global economic meltdown and unanticipated oversupply in silicon feedstock, the global photovoltaic industry is set to experience markedly higher growth in 2010, starting with, according to our respondents, Europe.

No

Don’t know

Yes

Do you believe that we will meet the targets for renewables set by Europe and the UN?

50%

28%

22%

South America <1%

Which continent currently presents the most opportunities for your business?

Australasia

Africa

Europe

Asia

North America

Antartica

13%

7%

33%

26%

21%

<1%

POWER AND ENERGY SOLUTIONS | SOLAR SURVEY 7

Which continent do you believe will enjoy the biggest growth over the next decade?

It seems as though, while our readers are convinced that Europe will be the money maker for their particular business, most are agreed that, on the whole, Asia will enjoy the biggest growth. Global demand for energy is increasing at a breathtaking pace, and this is particularly true in China, India and other rapidly developing economies. However, as demand on fi nite petroleum reserves and the price of the fuels derived from them continues to rise, renewable forms of energy are becoming more cost-effective and profi table. In the forefront of this renewable revolution is harnessing the sustainable power of solar energy.

Solar makers in China and Taiwan enjoy signifi cantly lower production costs, and are consequently increasing their market share in Europe and North America, at the expense of locally-based makers. This is thought to partly account for recent government moves to lower feed-in tariffs for PV installation projects, since it is Asian solar cell makers that are increasingly benefi ting from the government subsidies.

How has the recent global economic downturn affected your business?

According to the media, these are tough times for makers of solar cells. While consumers rejoice that the cost of solar panels is going down fast, manufacturers are suffering from lower prices combined with lower demand. Things got so bad at one stage that a respected market research fi rm predicted that “50% of existing solar manufacturers may not survive 2010”.

But was the crunch felt as keenly by our readers at the ‘coalface’ of the industry?

Europe

Australasia

Asia

North America

South America

Which continent do you believe will enjoy the biggest growth over the next decade?

Africa

Antartica

8%

8%

56%

12%

8%

8%

<1%

Decreased considerably

Decreased modestly

Remained constant

Increased modestly

How has the recent global economic downturn affected your business?

Increased considerably

6%

44%

25%

25%

<1%

8 POWER AND ENERGY SOLUTIONS | SOLAR SURVEY

How important are trade exhibitions/conferences to your business?

As PES suspected, trade exhibitions and conferences are crucial to businesses within the solar industry, with almost 70% of respondents rating them as important. Decision makers value exhibitions as an excellent source for gathering information to make informed business decisions for a number of reasons, including: providing an opportunity to investigate competitive products and services side by side; an opportunity to “touch and feel” products; make real-time evaluations and meet with exhibiting companies’ sales, marketing and technical professionals.

What is the biggest challenge that your company faces right now?

While many readers stated that ‘the economy’ is the biggest challenge that their company faced, it should be noted that solar power supplies affordable, inexhaustible energy to the economy. It also provides jobs and other sources of income. Best of all, the sun powers the economy without causing pollution, generating hazardous wastes, or depleting natural resources – it has no “hidden costs.” Finally, solar energy depends on a free fuel source, thus making it relatively immune to infl ation.

The good news is that the global economy is fi nally coming out of the worst recession since World War II as record-low interest rates and trillions of dollars in fi scal stimulus spur demand. Sales of homes in Western economies jumped in summer 2009 to the highest level since August 2007, and German, Chinese and Japanese industries are showing strong growth. As Kenneth Rogoff, a Harvard University professor and former chief economist for the International Monetary Fund puts it: “There is no question the global economy is healing and emerging from recession.”

Quite unimportant

Quite important

Very important

Neither important nor unimportant

How important are trade exhibitions/conferences to your business?

Very unimportant

6%

44%

25%

25%

<1%

Public perception

The economy

Lack of funding

Legislation

What is the biggest challenge that your company faces right now?

Competition

Lack of manpower

Material cost fluctuation

11%

31%

25%

19%

6%

8%

<1%

POWER AND ENERGY SOLUTIONS | SOLAR SURVEY 9

PES readership resultsWe’re always looking for ways to improve the reach and performance of the PES portfolio of titles, and so we asked our respondents to answer a few simple questions to gauge their feedback. The results are published here.

If you have any further comments, or would like to enquire about subscription, please contact us at enquiries@pes.eu.com

1

4

5+

How many other people typically read 'your' issue of PES?

3

2

18%

31%

27%

8%

16%

Interviews

Corporate Focus

News/product news

Which parts of the magazine do you particularly enjoy?

Lead stories

Cover features

Last Word

14%

31%

26%

11%

18%

<1%

Yes

No

Do you believe that PES helps you stay in touch with industry developments?

Don’t know

88%

12%

<1%

10 POWER AND ENERGY SOLUTIONS | SOLAR SURVEY

About PESPublished and distributed throughout Europe and North America, the Power and Energy Solutions (PES) titles and website are industry-leading publications for all matters renewable.

Having been established in Europe in 2005, PES is one of the most respected names in the PV and wind energy arena, with two dedicated titles serving each sector. The brand expanded into North America in 2008 and is firmly committed to bringing readers the latest news from leading industry figures. PES keeps its readers informed with all the latest global energy techniques and government initiatives.

Authoritative but not impenetrable, the full colour magazines always feature exclusive interviews with leading figures from across the planet – be they legislators and association executives from Brussels, or industry luminaries from London, New York, Washington, Beijing and beyond.

And with a special section given over to incisive analysis and comment from key figures across the industry, you can be assured of remaining up-to-date with the latest thinking. Our groundbreaking front section is the de facto destination for news, new products, exhibitions and conferences.

In addition, pes.eu.com is a regularly updated digital media destination that offers premium content such as video interviews and e-magazines, alongside breaking news and incisive features. The site is designed to complement the magazines and is an essential part of your working life.

Europe. Asia. Online. In print. PES: your ultimate solar energy destination.

MethodologyThe PES Solar Industry Report 2009/2010 provides insight into the views and expectations of over 15,000 readers of PES magazine across five continents. This unique survey draws upon trend data gathered over five weeks at the end of 2009.

The research was carried out by email among medium to large businesses, surveying over 15,000 chief executive officers, managing directors, chairmen or other senior executives (title dependent on what is most appropriate for the individual country) across the solar sector.

P&G Media Ltd, PO Box 310, Bristol, BS10 5WT, UK

Tel +44 (0) 117 955 3427www.pes.eu.com