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Final Report PHOTON's Solar Terawatt-hours Conference Series Europe 2012


At PHOTON's Solar Terawatt-hours Conference Series Europe 2012 in Berlin last week, the solar industry and utilities discussed the challenges facing the PV market. In a phase of consolidation, which is set to pick up speed, companies are preparing for further cost reductions and quickly fragmenting solar markets.

Please see the final report below:

PHOTON’s Solar Terawatt-hours Conference Series Europe 2012
discusses solar industry consolidation (final report)

Berlin, Germany – April 6, 2012. At PHOTON’s Solar Terawatt-hours Conference Series
Europe 2012 in Berlin last week, the solar industry and utilities discussed the challenges facing
the PV market. In a phase of consolidation, which is set to pick up speed, companies are
preparing for further cost reductions and quickly fragmenting solar markets.

Silicon capacities for another 4 years

The gigantic oversupply of production capacity in the silicon sector was the subject of
PHOTON’s 10th Solar Silicon Conference. Leading industry and company representatives
agreed that a massive supply overhang will worsen this year, forcing prices down toward cash
costs. According to Martin Meyers from PHOTON Consulting, the largest producers will have
more than enough capacity to meet expected demand – and that situation will remain
unchanged for at least another 4 years. »Only a few solar silicon [producers] are likely to
survive,« said Meyers. He thinks just around 11 manufacturers will make it to 2013, with any
company unable to produce for less than $30 per kg in danger of becoming irrelevant. Henning
Wicht, a consultant with iSuppli Deutschland GmbH, predicts spot prices will fall to $22 per kg in
2012 – and stay there in 2013. Meyer predicts that roughly 25 percent of 2012 capacity will not
make it to the following year. Overall, their market outlook is rather gloomy: the massive
expansion plans announced by the largest companies – including Hemlock Semiconductor
Corp., Wacker Chemie AG and OCI Co. Ltd. – will be delayed or, in some instances, possibly

New materials for solar inverters

At PHOTON’s 4th PV Inverter Conference, experts discussed the changes taking place in the
PV inverter industry. While inverter manufacturers have to sell their devices at continuously
lower prices – due to decreasing feed-in tariffs in major markets – grid requirements are getting
stricter at the same time: efficiency has to be between 98 and 99 percent, and a communication
interface is obligatory in some cases. Customized semiconductor components are a possible
solution, said Andrea Vezzini of the Bern University of Applied Sciences. This would involve
using semiconductor components based on gallium nitride, enabling more efficient inverters
with fewer components. High efficiencies can also be achieved by using silicon carbide
transistors. As market leader SMA Solar Technology AG introduced the first standard device
with silicon carbide transistors last year, experts now believe that more manufacturers will
follow. The relatively new components enable the maximum system voltage to be upped from
1,000 V to 1,500 V. This would mean that large-scale PV power plants could be built in a more
cost-effective manner.

Minimizing the risk of fires involving PV system

The focus of PHOTON's 4th PV SAFETY Conference was on how to minimize the risk of fires
involving PV systems. The solar industry is currently working on a number of different
approaches in regard to early detection: cell and module manufacturer Q-Cells SE is working on
ensuring that no module showing any tendency toward short-circuiting even leaves the
production line. The company has developed a test that is two to three times harder than the
IEC standards applied for module certification. Apart from the obvious safety aspects, the aim is
to ensure that modules generate a good amount of power even after 25 years in service. To
eliminate potential weak spots, Tigo Energy GmbH and several other manufacturers are offering
so-called power optimizers. These devices aim to achieve the highest yields by optimizing PV
system alignment, and they are also useful for monitoring a system or early detection of errors.
»The management system knows the voltage and temperature of every module,« said Tigo’s
Bernd Neuner. Even in large megawatt parks, a single module at risk of short-circuiting – which
could then cause an electric arc – can be detected precisely.

In the US, a large market is emerging for such intelligent PV systems: as of 2014, new regulations will
be in place that require PV systems to be in the position to detect electric arcs and, as a result,
automatically shut down. Q-Cells’ Karl Heinz Küsters said that he expects this trend to spill over into

Manufacturers being weeded out in 2012

According to the participants of PHOTON’s 7th PV Investors Conference, investors and
emerging PV markets will continue to profit from bargain-basement PV prices, while
manufacturing companies will have to endure steep operating losses for at least another year,
as oversupply persists into 2013. PHOTON Consulting’s Meyers predicts that roughly half of the
around 120 larger module makers doing business at the start of the year will not be in business
by 2013. The number will halve again in 2014, and, according to Meyers, it won’t necessarily be
the current leaders who survive. »At least four of the biggest 10 are not providing the quality
that will be needed for the future,« says Peter Fath, CTO of Centrotherm Photovoltaics AG.
That’s not to say PV manufacturing cannot be profitable, but potential earnings are now farther
down the PV supply chain than ever before. »Companies that have diversified out of pure
manufacturing are in a much better position to ride out this difficult time,« Meyers says.
PV equipment manufacturers under pressure to innovate

The intense pace of PV manufacturing cost reductions won’t slow in the coming years,
production equipment manufacturers said at PHOTON’s 7th PV Production Equipment
Conference. Equipment makers are under an enormous amount of pressure to deliver innovate
designs in order to secure new orders.

Centrotherm’s Wolfgang Herbst says manufacturers have four levers – tool development, technology
improvement, material costs and economies of scale – to manipulate cost in the silicon-to-module
production process. Centrotherm says it can already sell integrated lines that produce modules for 66
euro cents per W. The company also advises producers to consider making materials such as
metallurgical silicon instead of resorting to buying them.

In 2014, Centrotherm aims to deliver turnkey lines that can produce 276 W modules, with 20-
percent efficient cells, for an all-in cost of 54 euro cents per W. And should material costs drop
faster than anticipated, production costs would be at about 45 euro cents.

Ideas for a 100-percent renewable mix

At PHOTON's 8th Solar Electric Utility Conference, representatives of the energy sector
discussed the challenges posed by changes to energy policy in Germany and throughout
Europe, and also looked at possible solutions. Speakers stated that the emergence of large
numbers of solar and wind power plants affects all market participants, including utilities, grid
operators and electricity customers. It was pointed out that conventional power plants have
seen a decline in profits as a result of solar and wind installations influencing exchange rates at
certain times of the day. To be able do deal with fluctuating capacity, the consensus was that a
new system is required that is able to synchronize generation and consumption of renewable
energy. In addition, new business models for distribution, construction and operation of solar
systems were discussed: it was suggested that public utilities and their customers may benefit
from installing small rooftop PV systems.

The Asian part of PHOTON’s Solar Terawatt-hours Conference Series 2012 is taking
place from May 16-17 in Shanghai, China, and is an official partner event of the SNEC
fair. For further information, please go to:

About the PHOTON Group
Originally a publisher in the field of renewable energies, the PHOTON Group, headquartered in
Aachen, Germany, is active in providing comprehensive information on solar power generation.
The company’s PV magazines are published in Chinese, English, French, German, Italian and
Spanish. In addition, the PHOTON Group organizes international conferences, seminars and
workshops on specific PV topics. PHOTON Lab verifies the quality of solar components and
PHOTON Consulting advises the industry and government. The PHOTON Group has
approximately 240 employees, with offices in Aachen, Athens, Berlin, Boston, Hong Kong,
Hyderabad, Madrid, New York, Paris, Rome and San Francisco. Further information is available
at: www.photon.info

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