Solar cell production soars as demand falls

Oversupply and glut are the order of the day in the solar cell market as production rises while demand sinks. That may well lead to some companies going to the wall.

That’s according to the latest report from Displaysearch on the market for solar cells.

Solar cell capacity will grow by 56 percent during this year amounting to 17GW, and that trend will continue at a compound annual growth rate (CAGR) of 49 percent reaching 42GW in 2013.

However, demand for photovoltaic modules is set to shrink by 17 percent during the year. Charles Annis, author of Quarterly PV Cell Capacity Database and Trends, said: “With demand and capacity moving in different directions, the PV industry is currently experiencing an enormous over supply that is causing rapid price erosion and ptentially setting the stage for the failure of multiple cell manufacturers, particularly companies pursuing a-Si thin film solar cells.”

China is forecast to be the main region for cell production into the future, and manufacturers there account for around a third of worldwide cell capacity in 2009. More than 30 percent of thin film capacity use 600×1200 mm glass substrates. Between January 2008 and July 2009, around 11.4GW of new solar capacity was installed in fabs around the world.

Displaysearch said that while 95 percent of solar cell manufacturing capacity was for crystalline silicon solar cells, and only five percent for thin film cells, in 2009 the latter will account for more than 20 percent of capacity.

The largest manufacturer of solar cells this year in terms of capacity is First Solar, while Q-Cells and Suntech tie for second place and are not far behind.