Having bottomed out, the situation is taking a turn for the better. Following a difficult year in 2009, the Taiwanese photovoltaics industry is breathing a sigh of relief and accelerating away again. Two events characterized last year. Good news came in June when the Taiwanese government adopted the Renewable Energy Development Act, which includes cost-covering remuneration for solar power, opening up the prospect of sales on the domestic market. The bad news was the worldwide economic and financial crisis, which made it difficult for many manufacturers to get capital to increase production. The rate at which the Taiwanese PV industry had been growing since 2005 plummeted. The situation has eased again now, and domestic demand for photovoltaic arrays is also rising.
Domestic market growing slowly
The number of photovoltaic arrays in Taiwan is still moderate. The Industrial Technology Research Institute (ITRI) in Hsinchu says that, up to this spring, 858 photovoltaic arrays with a gross capacity of 11,970 kWp were connected to the grid. There were 373 installations in 2008, with a total capacity of around 3,500 megawatts, so the increase is considerable. Nevertheless, the Taiwanese government is still far from the goal it set itself. The Energy Act aims to have 31 megawatts of photovoltaic capacity connected to the grid by the end of this year, and 1,000 megawatts by the end of 2025. Solar power could then cover 1.8 percent of the countrys electricity demand.
The adoption of the Renewable Energy Development Act on 12 June 2009, after nine years of discussion, formulation and repeated reformulation, was greeted with relief by the industry. Patience was still required, however. The feed-in tariffs for solar power werent adopted until last January. Operators are to get 11.1883 New Taiwanese Dollars (NTD) (about 26 euro cents) for electricity from arrays with a peak capacity between 1 and 10 kilowatts. For arrays delivering between 10 and 500 kilowatts-peak, the payment is 12.9722 NTD (about 30,6 eurocents). If the solar power generated exceeds 500 kWp, operators will get 11.1190 NTD (about 26 eurocents). This remuneration is guaranteed by law for 20 years. Even so, things havent yet been completely wrapped up. As April began, there were still details awaiting clarification, about connecting arrays to the public grid, for example. The government did, however, promise that all questions still open would be settled by the end of the month.
More domestic system providers
Now that structural conditions have been sorted out, more and more companies are offering to plan and install PV arrays. There are more than 40 of them, including domestic cell manufacturers like Motech and international electronics and solar groups like Sharp and Kyocera. In March, Suntech Power Holdings of Wuxi, China, got people talking. It is to supply the crystalline modules for a 4.7 megawatt system in Youngan, Kaohsiung. Suntech Power is cooperating on this project with Fortune Electric Co., a manufacturer of products for the power industry located in Taoyuan, Taiwan, and now also a PV system provider.
The Taiwanese market, like every new one in photovoltaics, looks attractive. Domestic manufacturers have also taken notice. Frank OYoung, Vice Chairman of the thin film module manufacturer Sunner Solar and director of the board of the Taiwan Photovoltaic Industry Association (TPVIA), says, Several foreign system integrators from other countries, particularly from around the region, are trying to enter the PV market. They are looking for projects which they could provide with system integration services and products. The timing is good. Interest in generating solar power is growing in Taiwan. People are beginning to notice PV power as a way of generating revenue and as an alternative energy, confirms OYoung, who says demand for PV projects and micromorph modules in his company is rising as well.
Projects at home are good for sales and for brand recognition, but there isnt a huge potential on the island, which measures only 35,800 square meters, two-thirds of which is covered with mountains. For that reason, the Taiwanese PV industry fully recognizes that the island will never be the scene of mass installation. Instead, the industry aims to be one of the worlds top photovoltaics producers. In the production of solar cells, in particular, Taiwan hopes to be one of the top three countries. Taiwan was number four last year already, after China, Japan and Germany.
Cell manufacture predominates
In building their photovoltaics industry, the Taiwanese can draw on their expertise in semiconductors, optical disks, TFT-LCDs and precision machinery. Cell manufacture holds a central position. Productive capacity for solar cells was just 97 megawatts in 2005, says the ITRI. Between 2007 and 2008, it shot up from 930 to 2,030 megawatts. Then the financial crisis came along, so capacity only increased to around 2,600 megawatts last year.
The leading cell manufacturers are Motech Industries, Gintech, E-Ton, Neo Solar and DelSolar. Not all manufacturers have had to complain of a slump in business. As Motech marketing manager Sean Hsu happily reports, In 2009, Motechs solar cell shipment grew 32 percent over 2008. Total solar cell shipment reached 360 megawatts, with 90 percent from overseas sales. Motech has been producing solar cells since 1999. This year, the company plans to increase its capacity to one gigawatt.
Joeng-Shein Chen, Director of the ITRIs division of system innovation and application, found from a survey of manufacturers that cell producers intend to raise their production capacity to around 4,640 megawatts this year. If everything goes according to plan, one of the biggest jumps will be made by the Neo Solar Power Corporation, which says it will increase its production capacity this year from its current 240 to 800 megawatts. Neo Solar Power is now building a second plant for this purpose in Hsinchu Science Park in northern Taiwan. The firm says its current volume of orders is more than it can deliver, driven by the strong demand for outsourcing from Europe.
Complete value chain
Since recently, the whole photovoltaics value chain has been represented in Taiwan. As always, the base material solar silicon is a bottleneck. At least six companies have announced plans to set up solar silicon production plants. This April, the Taiwan Polysilicon Corporation became the first and so far the only firm to commence operations.
The ITRI says ten firms are making ingots and wafers. The largest of them is Sino-American Silicon, with a capacity last year of 400 megawatts, followed by Green Energy Tech, Wafer Works and Eversol. The productive capacity of all these manufacturers in 2009 was approximately 1,650 megawatts and should rise to 2,000 megawatts this year.
The Taiwanese are also forging ahead in the module market, with 19 manufacturers producing crystalline modules. ITRIs Joeng-Shein Chen reports that module makers have been very busy, in particular because of strongly increased demand from Germany since last December, and their order books are full up to July.
Manufacturing capacity for PV modules was 640 megawatts in 2009 and will probably rise to 1,500 megawatts this year. A recent participant in this round is Motech Industries. Motech announced strategic partnership with semiconductor producer TSMC in 2009 and obtained a cash injection, as Sean Hsu puts it. In the same year, Motech acquired GE Energys solar module production line in the United States. To strengthen its position in producing and selling modules in Japan, Motech set up a joint venture with Itogumi Construction Co. and facilities in Japan.
Motechs headquarters, divisions, subsidiaries and joint ventures are located around the world, including Taiwan (Tainan and Taipei), China, America and Japan. Dulci Chen is Motechs Director of solar module sales for Europe.
Thin film as a niche
Some ten companies produce thin film modules in Taiwan. The leading manufacturer is NexPower Technology. Established in 2005, the company is a subsidiary of a world-leading semiconductor foundry, United Microelectronics (UMC). Currently, our production capacity is around 100 megawatts, but well reach 200 megawatts pretty soon, reports Phil Wu, marketing manager for NexPower. The company makes a-Si modules, but will soon tackle a new line of business. We plan to launch micromorph tandem solar PV modules, with conversion efficiency reaching ten percent by the end of this year, says Phil Wu. In the field of research and development, NexPower focuses on advancing existing double junction (micromorph tandem) products and developing triple junction technology. The company is also researching CIGS applications.
NexPower is followed by Auria Solar, which is based in the Tainan Science Park. Auria says its already producing micromorph solar modules with an output efficiency of up to ten percent. As Connie Hung of Auria says, the company achieves this high efficiency with an improved shunt resistance (RsH) of up to 20,000 ohms.
At the moment, thin film manufacturers still have to battle with lagging acceptance and low public awareness of this photovoltaic technology. Frank OYoung, Vice President of Sunner Solar, which also manufactures a-Si thin film modules, openly admits that for Sunner Solar, last year was not a good year. That was due to many factors, such as the global recession, a drop in c-Si module prices, late certification, a lack of marketing and low acceptance of thin film. But great progress is now being made, he says, and Sunner Solars SA-100H standard module has been certified. There is now a reference project using this type of module at a military police base. The company has made its first deliveries to Japan, and an initial PV project has begun in Africa.
High concentration PV
Another optimistic voice is that of Annie Lai, Senior Director of Everphoton Energy in Taipei. The company makes high concentration photovoltaic (HCPV) systems. The market is coming back. People are talking more about photovoltaics, says Lai. Everphoton currently has a productive capacity of ten megawatts. Last year, the company supplied modules for a one-megawatt demonstration plant for the Institute of Nuclear Energy Research (INER). That facility in Luju, Taiwan, went into operation in December 2009. At present, Everphoton is negotiating for a further 60 megawatts demonstration site in Taiwan. HCPV is still a new technology compared with conventional PV. However, we are very optimistic about HCPV markets in Taiwan and worldwide demand, says Lai. Everphoton is now developing a flat-tracking CPV system for rooftop application. Patent pending, she adds.
Exports to China rise
The lions share of Taiwanese products goes abroad. In the first three quarters of 2009, China was the leading destination for the export of solar cells, with a 24.6 percent share. Then came Germany with 15.7, and Korea with 10.5 percent, closely followed by Spain and Italy (9.2 and 8.7 percent). Most of the modules (37.2 percent) go to Germany, followed by Spain (20.5 percent) and the Netherlands (15.7 percent). These figures come from an import/export study by the Customs Data Center, a government source.
China is becoming ever more important as an export customer. Frank OYoung gives four reasons for this: the PV incentives announced by the Chinese government last year, a shortage of solar cells in that country, its closeness to Taiwan, and Chinas growing solar market.
Important aspects in export strategies are utility scale projects (solar farms), cooperation with other manufacturers and service providers to allow the joint offering of complete solutions, and selling through distributors.
Negative growth in 2009
Opinions differ on how high the revenues of the PV industry were in 2009. ITRIs Joeng-Shein Cheng calculated 110 billion NTD for 2009 (about 3.5 billion U.S. dollars), and 101 billion NTD in revenue for 2008 (about 3.2 billion U.S. dollars). The Photonics Industry & Technology Development Association (PIDA), a non-profit organization which works with private enterprises and government agencies, speaks in a February 2010 report of NTD 86.9 billion in 2009, a negative growth rate of 18 percent compared to that of 2008. The majority of revenue comes from wafer-based and thin film solar cells, says the PIDA. These make up approximately 70 percent of the industrys revenue.
One way or another, these companies will have to work flat out if they hope to achieve the objectives laid down by the Taiwanese government, which wants to see 450 billion NTD in revenue by 2015. In comparison, the target for LED lighting is 540 billion NTD (about 17 billion U.S. dollars).
Government pushing the industry
The government has set up two programs to reach these objectives. One, the National Energy Program, focuses mainly on energy technology policy, energy technology and energy conservation, and carbon reduction. Solar PV is one of its 19 subheadings. The government intends to pump 30 billion NTD (around one billion U.S. dollars) into this program by 2014. Next comes the Dawning the Green Energy Industry Act program, under which photovoltaics falls into a single category along with wind power, bio-fuel and H2 energy and fuel cells.
The government thinks strategic development is necessary. It sees cell and module prices falling in the middle of the value chain (midstream). Upstream, therefore, the industry is to invest in the further development of such critical materials as polysilicon, TCO (transparent conductive oxide) layers for thin film modules and back sheets. It sees downstream potential in system integration, say, from higher demand on the domestic market and from such niches as building integration.
Expertise from abroad
Foreign expertise is in demand for the further expansion of the Taiwanese PV market. Last year, the Ministry of Economic Affairs, Department of Investment Services, published a report entitled Taiwan Photovoltaic Industry Analysis & Investment Opportunities. Its authors identify three optimal choices for foreign investors. One bottleneck is the production of polysilicon. Also in demand is expertise in the production of high-efficiency solar cells and thin film solar cell technology. For example, the Ministry writes, Production technology from leading companies for highly efficient over ten to twelve percent thin film is welcome. Taiwanese manufacturers are still dependent on production equipment from foreign suppliers. Thin film manufacturers, for example, use turnkey systems from Oerlikon and Ulvac. Machinery by Centrotherm, Roth & Rau and Schmid is also in use. This bottleneck is also known, which is why, for example, the ITRI is working with local manufacturers to develop their own manufacturing systems. All the same, production technology from abroad will be in demand until these systems are market-ready.
The government is helping its manufacturers acquire production technology by levying no taxes where no Taiwanese equivalent of a technology is available. The Taiwanese government offers foreign investors such incentives as tax concessions. The tax credits allowed in 2009 are now being renegotiated. Foreign investors also benefit from R&D subsidies, for which there are various programs and low-interest loans. The latter are, for example, granted for mid-term and long-term capital and for science parks.
Joint ventures with Taiwanese firms make it easier to enter the market, as Frank OYoung, director of the board of TPVIA, can confirm. To start a new business, I guess finding a local partner is the fastest way, he says, adding immediately that success is another matter, where many factors are to be considered, just like in any country. Still, given the high ambitions of the Taiwanese industry and government, the new law on feed-in tariffs, and the fledgling market, the general environment at looks good.
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