Competition and technology development in solar industry
The solar PV market is a highly competitive, and fast-growing sector. With a present market size of over USD 150 billion, it is expected to grow at over 25% CAGR and reach over USD 1000 Billion by 2028. The rising demand for low-cost solar power has put immense pressure on the solar companies to innovate and meet the market expectation of low-cost solar electricity. The majority of solar innovations have been experienced during the last decade of the solar industry. this is due to introducing the reverse bidding in the majority of solar markets, and putting pressure on the developers to optimize their procurement to finally deliver a low cost affordable clean solar power.
Over the last decade, the technology was taking two directions, on one hand, the solar thin-film technology was expected to provide low-cost PV modules, while the Crystalline solar PV technology was adopted by many solar companies. the solar PV module manufacturers compete on a per Watt basis of their module price, followed by warranty conditions, reliability, cell efficiency, etc. We have seen that in the spree of capturing the market, many companies have been selling the PV modules at a negative margin for a sustained period of time. This price war has led to the bankruptcy of many of the companies as they could not face the cutthroat competition of low-cost module supply in the last decade. Now we are reaching an era where few players are governing the whole industry in terms of Polysilicon ingot production and control the solar module supply chain with the demand-supply dynamics. The recent module price hike is an example of a situation in which post-pandemic the global solar module demand has increased, companies are finding it difficult to meet the rising market demand and the result is the price increase.
The companies such as First solar, Qcell, Miasol adopted the thin film technology route in the anticipation of bringing the redical change in the solar cell architecture, while the companies such as Trina, Jinko, and Sunpower adopted the traditional Crystalline solar technology route and kept doing the incremental technology developments. Though both the technology has now reached to over 20% module efficiency, the crystalline technology still governs about 98% market share and leads the technological race. Over the last decade, we could see only the gradual and incremental technological evolution. Some of the firms are trying to bring major architectural and radical changes in the solar cell technology, however so far there is no dominant cell technology that has been immersed to bring the radical shift in the m market. In the case of thin film it is expected that the perovskite technology will bring radical changes in the technology, however, the commercialization of this technology is still awaited.
Indian companies such as Reliance new energy are also trying to become a dominant player in the solar cell and module market, they have recently acquired the module manufacturer REC group as well the wafer firm Nextwafe GMBH. The Nextwafe’s technology is to do away with the polysilicon casting and sawing process which is highly energy-intensive. They are attempting silicon wafer manufacturing through Polysilicon tetrachloride gas deposition, which can bring radical changes in the solar cell manufacturing process and significantly bring down the solar cell manufacturing cost. It is the time when the market is facing immense pressure to bring down the PV costs and puts pressure on the lab-scale technology to bring to commercial scale.
The decade of the progress of most of these solar companies can be tracked through the share price trends in the International market. While the Firstsolar and Sunpower are far below their pricing levels a decade back, the Jinko and Trina solar are thriving the market growth. If any new entrants compete with these established players, it has to attempt a radical technological change in the market.