The conclusion was drawn after ongoing analysis found that pricing pressure for solar modules is driving suppliers to decrease their manufacturing costs. IMS added that over 70 percent of module production capacity will be located in Asia in the final quarter of this year; this share is expected to grow steadily throughout 2011, as Asian manufacturing expansion "accelerates".
The research company went on to say the "booming demand" seen this year has prompted high module shipment growth and limited pricing pressure for the module industry. It warned, however, that the "over heating" German market is cooling. As a result, it believes the PV supply chain is increasingly focusing on cost reduction.
These findings echo the words of Joachim Luther, Time Magazine’s ‘Hero of the Environment’ for 2008, who mentioned three important goals the solar industry should have, during his International Energy Week presentation held last week in Singapore: bring costs down, bring costs down and, again, bring costs down.
IMS went on to explain: "Many suppliers have recently announced ambitious cost reduction plans, all of which have a common theme an increasing proportion of production taking place in Asia."
Citing two examples, IMS said that both the Renewable Energy Corporation (REC) and Evergreen Solar had recently announced cost cutting measures, with REC stating it will be capable of producing modules for 0.97/W by the end of next year, and Evergreen Solar announcing its plans to produce modules for USD$0.90/W by the end of 2012 at its Chinese facility. "Ambitious plans indeed," commented IMS, "given that its costs at its U.S. plant were more than twice that in Q310, at $1.88/W."
"It is essential that PV costs continue to decline in order for PV to become a more sustainable industry that is less reliant on subsidies, and seemingly inevitable that manufacturing will shift to Asia, much as it has done in almost every other high-volume electronics market," said PV Research Analyst, Sam Wilkinson. "Large Chinese manufacturers are currently leading the industry in crystalline PV module cost reduction and other Western suppliers are joining them by moving their own production to Asia."