For the tenth consecutive quarter, the consolidated PV book-to-bill ratio is forecast to languish at sub-parity level for the third quarter of 2013, according to NPD Solarbuzz's latest market overview.
The prolonged, two-year downturn has hurt sales of PV equipment, impacting injuriously on suppliers and acting as further confirmation that capital expenditure (CapEx) among solar PV manufacturers has been limited over the past 18 months.
The PV backlog also stands at less than 10% of the backlog pile-up accumulated in the first quarter of 2011. Such low demand is another key metric indicating the CapEx downturn.
?A sure signal of the bottoming-out of CapEx, say NPD Solarbuzz, is when the Q/Q change in backlog returns to positive values. Forecasts show that this is likely to happen in the first quarter of 2014, although the next phase of capacity additions among the leading solar PV manufacturers will be marked by some distinct differences:
The leading PV manufacturers have different means of increasing shipments, either by acquiring the excess capacity delivered to competitors during the 20112012 oversupply deluge, or via asset-lite or fabless operations.
New production tools will help manufacturers add capacity, creating a buyers' market driven by PV equipment suppliers eager to secure new orders at reduced tool pricing levels.
Tool ‘leasing' options could pose an emergent threat to PV equipment suppliers' recovery in 2014. In this scenario, equipment suppliers deliver tools but stagger and defer payment terms to the manufacturers, with invoices added to suppliers' growing backlogs.
While it is too early to calculate the impact of manufacturers purchasing upgrades in the C-Si segment, one-off purchases and demo testing uptake are strong indicators of appetite, particularly among technologies such as PERC, which may provide a boost to shipment growth in 2014.
Although the recent and widespread injection of cash received by the majority of the PV industry's tier 1 manufacturers is positive, how much of this revenue will make its way to CapEx is anybodys guess.
Finally, while upstream book-to-bill posting values exceed 1, the downstream marker remains at the point where module suppliers are confident of a 40-45 GW end-market unfolding. Such evidence means that a meaningful upturn in new equipment order intakes may not arrive until the second half of 2014.
"The PV equipment supply chain continues to be in recession, with the full impact of the shipment deluge of 2011 and 2012 still taking its toll on forward-looking guidance," said Finlay Colville, vice-president at NPD Solarbuzz. "The tool leasing model may provide a short-term boost for domestic Chinese tool suppliers that have finished goods in inventory, but is essentially another factor delaying a meaningful uptick in revenues for PV equipment suppliers."