After going through the sharpest downturn during 2012 and 2013, solar equipment suppliers serving the solar photovoltaic (PV) manufacturing sector are forecast to enter a new upturn phase beginning 2015, says the latest report from NPD Solarbuzz.
Over the next six months, end-market solar PV demand will catch up with 45 gigawatts (GW) of effective capacity within the industry, and this will mark the official end of the two-year downturn in capital expenditure.
According to the latest NPD Solarbuzz PV Equipment Quarterly research, PV equipment spending could potentially reach $10 billion in revenues in 2017.
NPD Solarbuzz also predicts that plans will quickly emerge from PV manufacturers for new capacity additions, which will ultimately drive a strong rebound in revenues available to the equipment supply chain.
The first peak in PV capital expenditures, covering the period from 2008 to 2011, provided $38 billion of equipment revenues; however, these revenues were spread across several hundred PV manufacturers and a range of different PV technologies.
The next major growth phase for PV equipment suppliers, beginning in 2015, will be driven mainly by leading tier-one PV manufacturers across each stage of the PV value chain.
Furthermore, future PV manufacturing capacity additions are expected to occur in increments of 1 GW or more.
Initially, these additions will be motivated by economy-of-scale benefits in cost reduction and productivity. Thereafter, technology-driven spending, historically of minimal upside revenue potential to PV equipment suppliers, will gradually be phased in, as PV cell efficiencies approaching 20 percent become the industry standard, Soarbuzz said.
For 2013, PV equipment spending—covering tool revenues from crystalline silicon (c-Si) makers of ingots, wafers, cells, modules, and thin-film panels—declined to an eight-year low of $1.73 billion. This drop contrasts sharply with the previous cyclical peak of approximately $13 billion in 2011.
With capital expenditures largely frozen in 2013, PV equipment suppliers recorded less than $1 billion of net bookings last year, keeping the PV book-to-bill ratio well below parity. In the absence of new PV orders, many equipment suppliers were forced to restructure internal PV business units and focus on other technology sectors.
With c-Si based solar PV modules retaining a market share above 90 percent, new capacity expansions from c-Si PV manufacturers will dominate the PV equipment spending upturn beginning in 2015; however, the competing thin-film segment will continue to offer revenue potential for the equipment supply chain.
New thin-film capacity is also likely to be built in the Middle East and Latin America, as emerging regions seek to enter the PV manufacturing arena and differentiate themselves from crystalline silicon products made in Asia, Soarbuzz said.
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