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After a volatile business cycle over the last few years, the global solar photovoltaic (PV) technology market is ready for consolidation and realistic growth starting next year, Lux Research analyst Dr. Johanna Schmidtke told the Solar Energy Solutions (SES) consortium on Tuesday in Herzliya.
Schmidtke spoke of a market driven by a rash of subsidies from various countries which was overrun with new companies throwing together a plant and a process to get solar panels and equipment out to the consumer. This situation allowed many companies to make their fortunes, until supply began to exceed demand and the subsidies began to dry up, she said. These factors together with the global economic crisis led the market to shrink for the first time in 2009.
However, as with many technology bubbles, those who come out on the other side of a downturn will actually be able to make a sustainable living, she predicted. What needs to happen now is consolidation of companies and the development of more efficient products as well as unique production processes. Because there was such a rush to get into the market early, other production processes were adapted rather than the creation of industry-specific ones, she told the audience of Israeli solar energy professionals and academics.
According to Lux Research's predictions, the market in the US will pick up in mid-2010, while in China it could pick up by the end of 2009. Italy has begun removing bureaucratic barriers and could become a good market in 2010 as well. Spain, which was one of the first serious markets, has cut back its subsidies and will only stagnate through mid-2010 unless they revamp their programs.
Schmidtke predicted that the world was still a decade away from parity for utility-scale projects, where solar power would cost as much as coal or natural gas without government subsidies. Currently, most large-scale PV projects utilize subsidies or feed-in-tariffs, in which the government commits to buying power from a project at a set rate for a lengthy amount of time, to become cost-effective.
While Schmidtke put a question mark next to the German market's status, GE European Research Center analyst Dr. Toby Ferenczi told the audience that according to assessments, Germany would continue to pursue several gigawatts-worth of PV projects this year and next. Today, Germany is the world's largest PV market.
Formed a year ago, SES is one of the new Magnet Directorate consortiums. The Magnet Directorate operates out of the Industry, Trade and Labor Ministry's Chief Scientist's Office to encourage cooperation between companies and academia in various fields. The Directorate runs 16 different consortiums in fields ranging from energy, water and communications to traditional industry, Director Ilan Peled told The Jerusalem Post at the conference.
SES consortium chair Dr. Irit Chen-Zamero contended that the Israeli industry needed to cooperate to produce products which can compete in the global markets.
"Israel can't compete with the Chinese or other countries' mass production. We need to find unique, sophisticated niche solutions. The only way we are going to do that is by taking ideas from academia and bringing companies together. If each company goes its own way, we won't develop the right products," she said to the Post.
At present, the consortium numbers six industrial companies, among them Tower semiconductors, which employs Chen-Zamero, BrightSource Energy and 3GSolar, and 11 academic labs from the leading universities of the country, she said.
Chen-Zamero pointed to three areas in which she thought Israel had a chance of producing a world-class product: solar-thermal technology, dye sensitized solar cells, and concentrated PV, which utilizes mirrors to concentrate solar rays and improve panel efficiency.
Schmidtke also pointed out to the Post some Israeli companies to keep an eye on, including Solaredge, Soleil and Cimananotech. She predicted that Israel would utilize its expertise specifically to develop equipment and processes for solar technology products.