Quo Vadis, Photovoltaic? Business Designs of the Future

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Hope Russell
6 years ago
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1 Management Summary Quo Vadis, Photovoltaic? Business Designs of the Future C O N F I D E N T I A L

2 The future? The PV market is a pure play commodity business with fragmented structures substantial and structural changes expected Current market and future scenarios PV market 2009 Scenarios Subsidy driven growth in selected regions Very fragmented market (value chain, regions) Low degree of professionalism ( startup atmosphere) Heterogeneous business models Globalization of the businesses and players Chinese players entering EU US players entering China Immature technologies Oliver Wyman study Quo Vadis, Photovoltaic? Global competition Just a few, dominating player Focused, differentiated business models Tough competition in each value chain level Manufacturing (cell, module, silicon) Distribution Old economy player entering the market (e.g. Bosch, Siemens) Mature technologies Sustainable price decreases Commodity Business 1

3 Global PV Market Spanish market collapsed in 2009, Germany is by far the biggest market, US will grow significantly in importance PV Capacity in selected regions Forecast in MW, % % % %.000 France 58% 70 10% Germany Japan 0% 600 Green economic stimulus package of ~70 bn USD 1 69 USA Other substantial growth markets in 2009 : (Czech Republic, ) 675 Spain Market collapse due to limitation of government subsidies (500 MW until 2011) 2009 Italy % 250 India e CAGR China % 400 South Corea Source: EPIA May 2010, New Energy Finance, Bank Sarasin 2009, Oliver Wyman analysis Worldwide ~14% 2

4 German PV Market Overview of Distribution Landscape PV Modules are distributed via B2B (~70%) and B2C/project business (~0%) channels Extract of PV Value Chain PV OEM Distribution / Project Planning Installation End customers market Distribution Channel Structure Channel relevance in % of total MWp in 2009 ~20% ~10% Electricians, HVAC, Roofers Wholesaler (Electrical, HVAC, roofing) Installers Residential PV Module Producer Solar Influencer (e.g. architects, energy efficiency consultants) B2B business ~60% System Integrator & PV-Wholesaler Project engineers ~0% Non-residential /open space B2C business Remarks Separation into: B2B business: Sale of PV products to installers B2C business: Project business for financial investors / financiers and utility- or real-estate companies Supplier market to turn into buyer s market Installers to become more selective Established distribution channels and brands with increased importance for for sale of PV modules & systems (e.g. established HVAC, EWS installer networks) Solar Installer / Solateurs to become more sophisticated In other regions (e.g. US, China), the B2C channel will be substantially bigger Source: Oliver Wyman analysis

5 Development of players Although the PV industry was hit hard by increased margin pressure, some players perform substantially better in revenue and EBIT Revenues and margins of selected players 1 HY 2008 vs. 1HY 2009, changes in % Ø = -0% Revenue change (1 HY 2008 vs.. 1 HY 2009) Solar Enertech Q-Cells SE -140% -120% Solon SE -100% LDK Solar Solargiga Energy -80% JA Solar EBIT change (1 HY 2008 vs. 1HY 2009) Evergreen Solar Renewable Energy PV Crystalox Solar Centrosolar Group Gintech Energy Renesola -60% Solarfun Power PV Enterprise Sweden -40% Phoenix Solar Memc Electronic Materials Aleo Solar Yingli Green Energy Centrotherm Photovoltaics First Solar Sunways Solarworld Kyocera Suntech Power Solar Fabrik Solartech Energy Canadian Solar Conergy +100% +80% +60% +20% Mitsubishi Electric +0% Mitsubishi Materials Colexon Energy -20% Trina Solar Sunpower -20% +0% % -60% -80% Ø= -16,8% Source: Thomson, Oliver Wyman 4

6 PV business models Current positioning of major players In the world-wide PV industry multiple different business models currently exist; no clear archetypes have yet emerged. Current positioning 2009 (number of major PV players) Poly-Silicon Ingots & Wafers Cells Modules System integration Wholesale Total: 105 global PV players 4 1 System integration for projects Source: Oliver Wyman 5

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IEEJ:October Solar Photovoltaic market, cost and trends in EU

IEEJ:October Solar Photovoltaic market, cost and trends in EU Solar Photovoltaic market, cost and trends in EU 1 World PV Market Size and Application Segmentation Market Size in MWp 1600 1400 1200 1000 800 600 400 200 0 40 % p.a. 1998 1999 2000 2001 2002 2003 2004