Page 10 - Energize February 2022

NEWS

PV INDUSTRY GREW TO 191 GW IN 2021

Information from PV Tech before and especially in 2020. Yes, there
were ‘glitches’: the Xinjiang question;
he solar PV industry produced more than 190 GW of modules during 2021, as the curtailment reports out of China.
the industry went through its first major production-led supply cycle. This new But polysilicon production levels largely
Tdynamic – where end-market supply is driven by production constraints – is went as expected during the year.
set to continue for the next couple of years until the inevitable over-supply of raw In fact, when we looked at the
materials by 2024 in China. market-size for 2021 back in January last
This article – using new analysis conducted in-house by the PV Tech Market year, it was already shaping to be a ~190
Research team and contained in the latest release of the PV Manufacturing & GW year. The only doubt was whether
Technology Quarterly report – discusses why the industry has shifted towards a there would be a major outage at a key
production-led dynamic, what the implications of this are for downstream module Chinese polysilicon plant (which was not
users, how legacy demand-based models are no longer fit for purpose and what it to happen) or if the world would totally
means now for accurate forecasting of the key trends which impact on company’s reject buying PV modules which were
bottom-lines. Also, the contributions of the Top 10 and Top 50 module producers in priced 10 to 15% higher than they had
2021 are reviewed. hoped for.
Media reports focused on the
A year of limited product availability, unprecedented demand and marketing projects which were delayed; not
noise so much on the sheer volume done.
Like most things on the planet today, PV is a game of numbers. And this has never been Again, why has it been so surprising in
the case more so than in 2021. In this context, the numbers of value have been firmly a production-led (supply-constrained)
at the production level; not capacity, not false promises, not alleged force majeures world that not everyone gets a product,
justifying contract cancellations and certainly not numbers derived from market- or at the price they want? It was a
sizing levels now out of date, and reflecting a somewhat youthful naivety of how the seller’s market in 2021, especially if you
commercial world operates in practice. were selling polysilicon (gating supply
It is sad today that very few people track in-house production through the value to the upstream segment) or modules
chain, looking at the 100-plus companies which make up 99% of everything produced (gating to the downstream).
(polysilicon for solar, wafers, cells and modules). This is perhaps not surprising; over Also, it is really a surprise that
the past decade, there has been a gradual withdrawal of companies in citing in-house Chinese module suppliers prioritised
production, far fewer shipments or PV-related quarterly/annual revenues. In most their own market for much of H2
cases, the main reason for this is one of evasion; not wanting to show to the outside 2021? Why export when domestic
world that either the company makes little of its upstream components or – even pricing is good, there is a government-
worse – simply rebadges a PV module made by a different third-party entity. stamped mandate to build plants and
Simply using shipments as a marker for market-size (which alone would be better use domestic product, and margins for
than a top-down demand-based model) is also dangerous as you can quickly get into shipping globally are less desirable?
chronic double-counting; in particular counting the same module twice (once for the During H2 2021, China became a
OEM supplier’s shipment, and again for the final end-market or merchant supply). Go domestic ecosystem for production and
upstream in the value chain from modules, and this issue also becomes apparent today deployment of solar; this simply left
at the cell production stage, especially since the likes of Tongwei and Aiko started to others globally as handicapped and/or
make such high levels of cell product for the Chinese c-Si ‘engine’. prisoners of the short-term whims and
The PV industry in 2021 was production-led. Basically, this means that end-market tactics of suppliers they had become
demand for modules outstripped production levels by some margin; such is the desire reliant upon in the past.
globally today for renewables, coupled with the large uptick in global corporates (and The best check on the 190 GW figure
major utilities) rushing to hit 2030 sustainability-driven targets. is production of polysilicon (in tons)
and then the other key part – knowing
Checking on the 190 GW figure the g/W values through the year. Here,
In a production-led climate, knowing what is produced (and shipped) through there was good news for downstream
the upstream value chain is everything. In 2021, there was only one bottleneck – companies. The decline in g/W (i.e.,
polysilicon. At no point was there any meaningful shortage arising from wafer, cell how much polysilicon is needed for any
or module capacity. Everything depended on how much polysilicon was produced in Watt of module rated power) saw strong
China. downward movement during the year;
Thankfully, there were no incidents which impacted supply; at least ones that increased mono use as part of efficiency
have arisen in the past from natural disasters or factory explosions, as has happened gains (power density at the module

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