A sign of a thriving industry is an increase in demand for production equipment, which is exactly what the global PV market is experiencing. German solar production equipment manufacturers enjoy a global market share of over 50%, so they are reaping the rewards of the increase in demand, with higher incoming orders and turnover.
There is a slight discrepancy in the numbers, as massive investments are made in the production of PV around the world and in new emerging markets. In total, incoming orders for German manufacturers of components, machinery and equipment rose by 142% in Q1 compared to the same period last year, while turnover only increased 60% in that period, according to the German Engineering Federation (VDMA).
The considerable investment activity by solar cell manufacturers in increasing existing and new production capacities continues; production is working to capacity, however the low prices have a negative impact on sales, commented Chairman of VDMA Photovoltaic Equipment Dr. Peter Fath. Orders are already coming in from new markets such as India.
The German production equipment manufacturers cover the whole value-chain of the PV industry, however it was the cell production equipment that made up by far the largest proportion of the orders during Q1 2016, with 61% of the total.
Asia the key
With Asian countries accounting for 75% of the total order volume, it is clear that the thriving PV market in that part of the world is driving growth in the sector. China in particular has been on a campaign of increasing its PV production capacity, which it is planning to use to supply emerging markets all over the world. This increase in capacity is one factor that is causing fears among market onlookers that an oversupply in the industry is just around the corner.
However, emerging markets for PV installation in places like India, Turkey and Latin America are also leading to the continued growth of the PV equipment market, although the majority of these countries have yet to make big strides in the manufacturing side of the industry. Outside of Asia, 12% of all production equipment orders for German manufacturers came from the U.S., 9% came from within Germany, and just 4% came from other areas of Europe.
In the first quarter 2016, the order situation was very positive, said Dr. Jutta Trube, Director of VDMA Photovoltaic Equipment. For the coming months we see a positive development in incoming orders and turnover. The demand for highly efficient production technology such as PERC, PERT and the like is at a high level.