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PHOTON CONSULTING SOLAR ANNUAL 2006(初稿06-06-09)
PHOTON CONSULTING SOLAR ANNUAL 2006
Michael Rogol, Paul Choi, Joel Conkling, Anthony Fotopoulos, Keith Peltzman, Scott Roberts
Executive Summary (rough draft*)
The solar power sector is sprinting ahead of our previous estimates – production growth, price increases and cost reductions are stronger than expected. The sector achieved 44% volume growth 50% revenue growth and 149% profit growth in 2005. Rising residential grid prices, robust policy support and new sales channels are driving six-fold production growth (40 to 50% annual growth) through the end of the decade. Initially, this rapid expansion of production raised our concern that a »glut« might reduce prices and margins. However, interviews with 400+ solar power executives and policy makers in 10 geographic markets have fortified our conviction that demand will significantly exceed supply through the end of the decade, that prices are likely to remain high, and that margins are likely to continue expanding for at least 3 more years. Overall, we suspect that many managers and analysts are significantly underestimating the sector’s strong prospects for volume, price and earnings. This report highlights several of the industry’s strongest sprinters, including Conergy, Evergreen, First Solar, GT Solar, Hemlock, M Setek, Motech, PowerLight, Q-Cells, REC, Sharp, SolarWorld, SunPower, Suntech, and Tokuyama.
Solar production increasing six-fold by 2010
Supply: 10 GW by 2010. Solar production increasing six-fold by 2010 Supply: 10 GW by 2010. A review of 1,000+ solar companies, 400+ interviews and 50+ site visits have convinced us that production will reach at least 10 GW by 2010 (530% growth versus 2005). The bulk of this will remain crystalline silicon (c-Si) solar cells/modules With production of high purity Si feedstock rising from 32,000 tons in 2005 to at least 85,000 tons in 2010, at least 60 to 65,000 tons will be available for the solar sector. At the same time, increasing cell efficiencies and decreasing waste will enable silicon usage per W to improve by more than 30%, from 10.5 g/W today to 7 g/W in 2010. The result is that total c-Si cell/module production will likely be 8 GW or more by 2010 In addition, we see even stronger growth of non-c-Si technologies (CdTe, a-Si, CIS, µc-Si) capable of filling a portion of demand unmet by c-Si. There is realistic potential for non-c-Si to expand from 0.15 GW (9% market share) in 2005 to 2 GW (20% market share) in 2010. There is upside for both c-Si and non-c-Si beyond our forecasts.
Demand will outstrip supply through at least 2008, probably 2010
Demand: No »glut.« There is much, much more demand than capacity, and demand is growing faster than supply. Today, the global demand is approximately 5 GW for modules at prices of $3.50 to $4.50/W. This is far greater than production (2.4 GW in 2006), with the result being a 15% increase in module prices and average pre-tax margins above 30% for the overall sector in 2006. By 2008, we expect demand will expand to 8 to 10 GW at current prices compared with capacity of only 5 GW. Two important drivers of demand appear likely to fuel very strong growth of solar. First, residential grid prices are rising quickly in many markets as high hydrocarbon prices are passed through to residential customers. 2008 prices for residential grid electricity appear likely to be 30 to 40% higher than 2005 prices in many markets. Second, the political case for solar is getting stronger due to high energy prices, climate change and national security concerns, and an increasing number of solar jobs. In this setting, we believe significant reductions of existing solar programs are unlikely and that there is realistic potential for global solar policy spending to increase from $1.7bn in 2005 to $15bn by 2010. Both of these factors – significant increase in grid prices and policy spending that is expanding faster than production – make it likely that demand will outstrip supply through at least 2008, perhaps 2010.
Managers and analysts are underestimating prices and profits. Price and profit: Consensus too conservative. Based on interviews with executives who oversee more than 80% of industry volume and fund managers who oversee more than 70% of the industry’s float, we are convinced that consensus is far too conservative. Specifically, we believe that most business plans and models for this sector include assumptions about volume, price and margins that are unrealistically low. With demand outstripping supply, prices will remain firm and revenue will expand quickly from $12.4 bn in 2005 to $18.8 bn in 2006 (51% growth) and $27 bn in 2007 (44% growth). At the same time, costs are falling 7 to 10% throughout the supply chain (with exception of silicon) and pre-tax margins will continue to expand from 25% in 2005 to more than 30% in 2006 and more than 35% in 2007. By 2010, there is realistic potential for revenue of at least $70 bn in 2010 (40% CAGR 2005 to 2010) and for pre-tax profit to grow at least as quickly. For the last three years, many business managers and analysts have been too conservative in their evaluations of the sector. We recommend incorporating stronger volume, price and margin assumptions into strategies and models.
Top companies are running fast to establish leadership positions
Strongest sprinters. The leading solar companies are in a full-sprint to grow even faster than the overall sector and establish sustainable long-term advantages. As we screened the sector, we have sought to identify »industry leaders« and »meteoric growth companies.« Upstream companies with the strongest growth prospects include REC, Tokuyama and Hemlock. In the middle of the supply chain, Evergreen, Motech, Q-Cells, REC, Sharp, SolarWorld, SunPower and Suntech appear likely to achieve explosive growth. Downstream, Conergy is likely to remain the world’s top integrator. All of these companies have realistic potential to exceed 10 percent global market share within their segment by 2010. Others with potential for meteoric rise include Carmanah, First Solar, GT, M Setek, and PowerLight. This report turns a spotlight on each of these sprinters to evaluate their growth potential over the next five years.
Solar Industry Estimates
2004 2005 2006 2007 2008 2009 2010
Global cell/module production (GW) 1.2 1.65 2.37 3.4 5.0 7.6 10.4
Growth (%) 44% 44% 43% 48% 51% 37%
c-Si cell/module production (GW) 1.1 1.5 2.1 2.7 3.9 6.1 8.4
Non-c-Si (MW) 0.07 0.15 0.28 0.70 1.12 1.50 2.00
Non-c-Si market share (%) 6% 9% 12% 21% 22% 20% 19%
Module global avg. selling price ($/W) $3.25 $3.70 $4.25 $4.50 $4.50 $4.25 $4.00
Inst. system global avg. selling price ($/W) $7.25 $7.53 $8.00 $7.97 $7.79 $7.36 $6.95
* This is a rough draft. A final version will be released in July 2006. All data, companies and comments are preliminary and are subject to change.
Note: The authors express their appreciation to CLSA Asia-Pacific Markets, publisher of previous research on solar power sector including Sun Screen (July 2004) and Sun Screen II (July 2005). |
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发表于 2006-6-11 17:29