Asia PV materials market boosted by rapid shift in production dynamics, finds Frost & Sullivan

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The Asian market for PV materials is benefiting from a rapid shift in production dynamics and solid, sustained government support schemes throughout the region, say analysts Frost & Sullivan in their latest Strategic Analysis of Asian Photovoltaic Materials Market report.

Ever since Asia began positioning itself as an important PV production hub, PV material suppliers have transplanted their production processes to the region, attracted by many Asian countries’ commitment to reducing carbon emissions and widening their PV markets. Government support – in the shape of tax credits, generous feed-in tariffs, and subsidies – has merely strengthened Asia’s appeal.

In its report, Frost & Sullivan reveal that Asia’s PV materials market generated $1.94 billion in revenue in 2012 – a figure that is expected to rise to $4.8 billion by 2018, spurred by continued technical innovations in PV-based technologies that are helping to improve efficiencies and reduce costs. Frost & Sullivan finds that China, Japan and Taiwan share more than 70% of the Asian market share for PV materials.

"Global PV material manufacturers have established strong partnerships with PV module manufacturers, aiding market development," said Frost & Sullivan’s senior consultant for chemicals and materials, Balasubramaniam Ramani. "The close relationship between module manufacturers and material suppliers improves the material suppliers’ insight into the market and ensures timely delivery as well as enhanced product offerings."

Growth without subsidies

The obvious next phase for Asia’s PV materials market, according to the report, is to achieve greater affordability, and perhaps grid parity, without the need for generous government subsidies. As the industry pushes itself to improve efficiencies and lower costs, many smaller market players have already found themselves squeezed out, with ongoing price wars triggered by the prolonged economic downturn damaging many companies’ bottom line.

In light of these economic pressures, Frost & Sullivan predict only moderate initial growth for Asia’s PV materials market between now and 2015, with ever-tightening incentive policies set to slow the industry’s growth over the next 24 months. With fewer subsidies and incentives, uncertainty is likely to spread during 2014, before confidence and growth follows.

"The period between 2015 and 2020 is likely to be a phase of rapid growth primarily due to the likely shift of backsheet production expected – the only segment where the move from European countries to Asia is yet to occur," said Ramani, before adding: "Japan and China are likely to surpass European countries in terms of PV installations after 2015, lending strong momentum to the Asian PV materials market."