by Finlay Colville, Senior Analyst, Solarbuzz

India has clearly caught the attention of the PV industry, both as an emerging manufacturing hub, but also a market that could be at the forefront of Asian demand growth over the next 5 years. The New Solar Mission policy seeking 1 gigawatt (GW) of domestic solar installations in its first phase now builds on a wide range of policy initiatives at the regional level. This active policy environment has stimulated photovoltaic project development activity and Solarbuzz’s recently issued Asia and Pacific Major PV Market 2010 report captured some 5 GW downstream. The industry challenge now will be to align the emerging policy environment with appropriate financing structures to deliver on this huge aspiration for new PV installations.

Matching this downstream fervor, local Si cell and thin-film panel manufacturing has seen considerable investments into plant infrastructure and equipment tooling during the past few years. At first glance, these equipment deals and capacity expansions look remarkably similar to trends seen previously in Taiwan during 2006-2007, and subsequently in Korea during 2008-2009; frequent announcements of turn-key line deals coupled with aggressive ramp-up schedules announced. But the situation within India today is somewhat different to Taiwan cell making back in 2006. To understand this best, let’s do a quick comparison between c-Si production and tool supply in Taiwan during 2006-2007 and what’s been happening within India during 2009-2010.

Cell manufacturers within Taiwan were among the first to fully embrace the turn-key line culture that penetrated the equipment supply landscape back in 2006. Indeed, many of today’s household names located within Taiwan began manufacturing using turn-key c-Si lines to fast track initial expansion phases. Thereafter, most moved to home-build status whereby they would purchase key process tools directly, rather than via packaged end-to-end lines. Cell manufacturers within Taiwan were more than capable of making this transition swiftly with a well established high tech manufacturing supply chain and a highly skilled workforce to call upon, and ample demand from a growing PV industry.

PV cell manufacturing within India boasts a heritage to match almost any other country worldwide; players such as BHEL, BEL, Tata/BP-Solar, CEL, and Webel (now Websol) were producing c-Si cells before many of today’s top tier players had announced their first groundbreaking ceremony. However, it took the introduction of new players into the Indian PV manufacturing community such as Moser Baer, Indosolar, Solar Semiconductor, Euro Photovoltaic, Jupiter, and XL Telecom to push cell manufacturing within India to the next level.

Today, PV fabs located within Greater Noida or Fab City appear at first glance very similar to other high-tech industrial zones located elsewhere across the Asia Pacific region. Therefore, it should come as no great surprise that turn-key c-Si and a-Si/uc-Si lines occupy the production floors there. In fact, turn-key lines dominate midstream PV manufacturing capacity today in India, commanding a figure way above any other leading PV producing country. The numbers speak for themselves: 77% of manufacturing capacity by quarter end Q3’10 will be powered by turn-key lines compared to a worldwide figure hovering around the 15% mark. Solarbuzz analysis reveals that across all midstream PV manufacturing, c-Si cell lines account for over 90% of manufacturing capacity. Further, some 85% of capacity is installed by Tier 2 PV makers -- a clear indication that manufacturing has yet to reach high utilization and fab yield levels. That said, midstream manufacturing capacity remains on track to pass the GW level by year-end 2011.

Leading turn-key equipment suppliers such as Centrotherm, Roth and Rau (including OTB-Solar), and Schmid have all had considerable success within India during the past few years, and healthy backlogs still exist from deals announced recently. As a result, key process tool suppliers feeding into these turn-key lines have similarly benefitted from the explosion of turn-key equipment bound for India. What differentiates India though from the early days of Taiwan c-Si growth however are the extended periods to reach mass production on these lines, coupled with the limited workforce at hand to move from turn-key buying into custom line (or home) build territory.

Therefore, the near term outlook for equipment supply meeting the next phases of capacity expansion in India may well see a repeat of turn-key line purchases; this time incorporating some of the new high-efficiency c-Si lines featuring both incremental efficiency enhancement tooling at the front or back-end or dedicated selective emitter based lines. Moreover, if plans to develop the upstream supply base within India come to fruition, turn-key plants for poly-silicon production would then provide significant upside revenues for our leading set of turn-key equipment suppliers. As a result, c-Si manufacturing within India looks set to remain a high priority for turn-key equipment suppliers for a few years to come, with the addressable market size ultimately determined by the success of downstream policies and the timelines during which preference is afforded to local manufacturing for both cells and modules across the country.

Figure 1

Solar panels adorn the entrance gates to Fab City, just outside Hyderabad. Currently, its sole PV tenants -- Solar Semiconductor -- boast the largest module manufacturing facility within India and, over the next 18 months, will complete delivery and commissioning of multiple turn-key c-Si cell lines located across two fab sites.

Figure 2

Adapted from analyses contained within Solarbuzz’s forthcoming Quarterly PV Equipment Report, midstream c-Si cell and thin-film panel manufacturing capacity within India today is heavily biased towards turn-key (TK) lines with home-built (HB) lines accounting for just 23% of capacity by quarter-end Q3’10. Tier 2 c-Si cell makers account for the majority of the overall capacity installed, and are due to come online through 2011.

Finlay Colville is a Senior Analyst with Solarbuzz, and is responsible for reporting on solar manufacturing equipment including technologies, trends and forecasts within the solar industry. He has been a frequent speaker at major solar industry events worldwide, and is a regular contributor to leading solar trade magazines and online newsletters. Prior to joining Solarbuzz in March 2010, he was Director of Marketing for Coherent, Inc.’s solar business unit. He holds a bachelor’s degree in Physics from University of Glasgow and received a PhD in Laser Physics from the University Of St. Andrews, Scotland.

Contact details
Finlay Colville, Senior Analyst, Solarbuzz
An NPD Group Company
Cell phone: + 44 7876 140 355

Email: finlay.colville@solarbuzz.com; Website: http://www.solarbuzz.com

About Solarbuzz®
Solarbuzz, owned by The NPD Group, is a globally recognized market research-based business focused on the solar energy and photovoltaic industries since 2001. Solarbuzz clients include many of the largest global PV manufacturers, together with major investment banks, equipment manufacturers, materials suppliers, hedge fund companies, a wide range of other multi-nationals considering participation in this industry, and the largest PV system integrators. Solarbuzz offers a wide-array of reports, including Marketbuzz®, an annual global PV industry report, and Solarbuzz QUARTERLY, which provides historical and forecast data on the global PV supply chain. The company’s research also provides annual Downstream PV Market Reports by region for the European, Asia Pacific and US markets. In addition, Solarbuzz.com is a recognized and respected online resource for the solar industry. For more information, visit www.solarbuzz.com

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