PV Supplier Market Intelligence Program Quarterly Report

PV Market Intelligence Quarterly Report

The Clean Energy Associates’ Supplier Market Intelligence Program (SMIP) is a quarterly independent, unbiased market intelligence report of the top PV module manufacturers in the world.

Access to timely, accurate information is strategically important, and its absence creates sizable risk. The program brings together objective, high-quality, multi-sourced and verified data to create the supplier market intelligence report. The report includes detailed information and analysis on capacities, technology, and efficiency roadmaps, as well as our own Manufacturing, Capacity and Technology (MCT) ratings for each supplier.

The quarterly report contains critical up- to-date operational data for the largest Tier 1 suppliers, such as Canadian Solar, JA Solar, Jinko Solar, Trina Solar, LONGi and Risen. CEA’s research team utilizes high quality, verified data to create the SMIP report and deliver supplier insights straight from technical management teams.

Report ContentsCEA’s Supplier Market Intelligence Program provides deep market intelligence on key module suppliers. Information on capacity, technology, product development and industry positioning is delivered to assist clients in assessing the risks and opportunities associated with many potential vendors and suppliers in the highly dynamic solar industries.

• Covers all major industry players• Timely, accurate, and detail oriented• Drives supplier sourcing decisions• Compares suppliers based on their scale, market reach, and track record

Sample Content | High Power Modules and Wafer Alliances In late 2019, Risen was the first manufacturer to announce a 500 W module. Soonafter, manufacturers lined up in announcing high-power modules, with the nominalmodule power of the announced products even breaking the 600 W milestone.

The main motivation for the suppliers to develop these new higher power products isto gain market dominance by aiding the project developers in lowering the levelizedcost of electricity for their projects through balance of system (BOS) and fixed costper module savings.

A wide range of technology upgrades on the ingot, wafer, cell, and module level aidedthe development of high-power modules. The biggest technological contributor forthis trend is the introduction of the G12 (210 mm) and the M10 (182 mm) wafers.These two new wafer sizes led to the formation of alliances between the leadingmanufacturers based on their preference of wafer sizes, to develop a commonstandard and unify supply chains.

In general, manufacturers that have large inhouse wafer capacities and higher verticalintegration prefer the M10 (182 mm) wafer size over the G12 (210 mm) since the costof vertically upgrading wafer, cell, and modules lines is very high. The suppliers usingthe G12 (210 mm) wafers are sourcing them from Zhonghuan, thereby giving themmore flexibility and limiting their upgrades to only the cell and the module level.

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Wafer Sizes | Power Gain of New Wafer Sizes Compared to a G1 Baseline

M10 Alliance G12 Alliance

LONGi, Jinko Solar, Canadian Solar, Talesun

and others

Zhonghuan, Trina Solar, Risen, Sunpower, GCL, Seraphim and others

Suppliers like JA Solar, ZNShine and Astronergy have announced products using both the wafer sizes.

<-------------- Alliances -------------->TransitionLegacy

8.8% 30.6%75%

G1 M6 M10 G12

Sample Content | Dense Interconnection RisksOn a module level, the major technological upgrade has been the adoptionof dense interconnection technologies like paving, tiling and shingling withthe intention of increasing active cell area in the module and thereby themodule efficiency.

Paving has been the most preferred choice with the likes of LONGi, Trinaand Canadian Solar already adopting the technology. Tiling on the otherhand, has been only adopted by Jinko Solar and Hanwha as of now.Manufacturers are adopting these technologies at a very rapid pace, whichmight come at the cost of higher reliability risks as they pose technicaldifficulties that need to be addressed.

Paving reduces the intercell gap to about 0.5 mm to 0.7 mm fromconventional 2.0 mm gap. Each of the manufacturers adopted their ownvariant of the paving technology. The reduction of cell gaps, especiallywhen using cut cells can cause excessive cracks. This requires themanufacturer to be more stringent about cell cutting and adopt damagefree cutting to reduce the microcrack risk either during modulemanufacturing or operation. Lamination is also very important as the MBBwires get much thinner than 5BB ribbons.

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Dense Interconnection | LONGI’s Paving Technology

Laser Cutting

Damage Free Cutting

Manufacturing Risks| Damage Free Cutting Technology

Sample Content | Polysilicon Supply Chain ConsiderationsPolysilicon pricing continues to be a hot topic in the solar industrysince 50,000 tons of production capacity went offline in Julyfollowing explosions at GCL-Poly’s Xinjiang facility. The solar industryexperienced another polysilicon price shock in August when newsoutlets reported Tongwei halted production at its 20,000 tonpolysilicon facility in Sichuan, China, following flood warnings. DaqoNew Energy also experienced minor fires from a gas leak on July 1,which took 6,000 tons of production capacity temporarily offline.

Based on these developments and the resulting reverberations intodownstream supply chains, CEA expects significant impacts on bothpricing and perceived supply in the short term with the bulk of anysupply constraints culminating in Q3 and Q4 of 2020 and lingeringeffects extending into the first half of 2021. Despite this series ofunfortunate events in the industry, we estimate there to be anample supply of solar-grade polysilicon available for the sector, andpricing increases to be a result of unfortunate timing on industryslowdowns and suppliers looking to recover margins followingrecord lows in pricing.

Pricing Data | Energy Trend Monthly Average Polysilicon Price Tracking in USD/kg

LONGi recaptured two titles this past quarter and is once again thelargest module and largest cell producer in the world since being upset inQ2 2019. LONGi added 10 GW of new module capacity and 7.4 GW ofnew cell capacity to reach 23.5 GW of total module production and 17GW of total cell production. The expansions do not stop here, by the endof this year a minimum 5 GW of additional module capacity is expectedalong with several GW of cell capacity.

Other suppliers are also ramping up expansions with many maintainingplans for additional capacity into 2021. For modules, Risen added 2.5GW, Trina added 6 GW, and Talesun added 1 GW. First Solar, Talesun, andJolywood took older capacities offline last quarter. For cells, Risen added2.5 GW, Trina added 2 GW, and Talesun added 0.5 GW. Jolywood andJinergy both took obsolete cell capacity offline. Moving into the latterhalf of 2020, we expect remaining multi capacity to retire at a greaterpace and equipment unable to be economically upgraded to larger wafersizes increasingly being retired. Some suppliers not covered in this reportsuch as ZNShine and Wuxi Suntech are keeping strategic amounts ofmulti capacity online for the Indian market, but nearly all other suppliershave released their retirement timelines.

0 GW

5 GW

10 GW

15 GW

20 GW

25 GW

Supplier Module Capacities by Quarter 2020 Q2

0 GW

3 GW

6 GW

9 GW

12 GW

15 GW

18 GW

Supplier Cell Capacities by Quarter2020 Q2

Sample Content | Capacities

Sample Content | Supplier Rating Quarterly ChangesThe Manufacturing Readiness Level (MRL), Capacity Scale (C) and Track Record (T) rating changes are marked with arrows in the tables and we can see some trends forming.

Most of the MRL ratings for bigger wafers M6 (166mm) and G12 (210mm) increased as suppliers are ramping up their progress towards launching large wafer products, but few are already producing and shipping as can been seen from the C and T ratings.

Shingling, tiling, and paving MRL ratings increased for most, but only Jinko, and to a smaller extent Trina, have built lines.

Jolywood and Talesun are catching up in bifacial double glass MRL and C ratings. From the increased C ratings, we can see that many suppliers have built half-cut and MBB capacity, but they still must ramp shipments.

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Sample Content | Technology MaturityIn this version of the PV SMIP, the new Technology Maturity rating has been adopted. Theseratings are the sum of the Manufacturing Readiness Level, Capacity Scale and Track Record(MCT) ratings. The idea behind the adoption of this new rating system in combination withthe incumbent MCT ratings, is to draw a better comparison between suppliers on wherethey stand on each technological front and draw analysis on the maturity of theirtechnologies. The maximum Technology Maturity rating a supplier can be awarded for eachtechnology is 30. Based on this rating, the maturity of a technology for a particular suppliercan be classified into three categories.

• R&D Stage: If the Technology Maturity rating is under 10, then the technology isconsidered to be still in the research and development (R&D) stage. This means thatthe supplier is still evaluating this technology and has not developed any sizeableproduction capacity for this technology yet.

• Capacity Ramping: The supplier is said to be in the capacity ramping stage if theTechnology Maturity rating is over 10 and less than 20. This means that the supplierhas completed evaluating the technology and is building production capacity alongwith possibly delivering small volumes of shipments.

• Mass Shipments: If the Technology Maturity rating for a supplier is over 20, then itmeans that the supplier has already built sizeable amounts of production capacity andis also delivering mass shipments of the products employing the technology.

Sample Content | Dense Interconnection and High-Power Modules

1010

• 500 W modules are old news, 600 W modules are making the rounds, and an 800 W module make a debut.

• Almost all suppliers unveiled 600+ W options combining larger wafers with new dense interconnection technologies. Many products were released prior to SNEC as part of company specific product unveilings, but many variants were on display.

• Future supplier capacities for large wafer products are certain, but the practical supply of such products is likely to be limited based on component constrains and application restrictions.

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Sample Content | Tiling, Paving, and Shingling

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Jinko’s Tiling Design Trina’s Paving Design HSPV’s Shingling Design

Sample Content | Larger Wafer Adoption Plans and Timelines

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33 GW 34 GW 35 GW 35 GW

19 GW30 GW

40 GW50 GW

2020 2021 2022 2023

Existing Production Capacity New G12 Wafer Production Capacity

• Gallium doping is widespread following Shin-Etsu’s patent expiration. Initial year degradation warranties are lowering from 2.5%+ to 2.0%.

• Zhonghuan moved to offering gallium doped products. The supplier also provides a boron-gallium co-doping option for interested parties looking to test the technology. The share of G1 use in the industry will reduce overtime as M6 becomes the new baseline product for most suppliers. Zhonghuan forecasts M2, G1, and M4 wafer use will almost entirely phase out by 2022. Newly built capacity by any supplier will likely be capable of handling M10 wafers with a large portion capable of handling G12 wafers.

• Zhonghuan will be expanding new capacity by about 10 GW/year. Existing capacity will be upgraded on a rolling basis to accommodate larger wafers sizes starting with the oldest production lines. As old capacity is upgraded to handle larger wafers, expect many suppliers to improve capacities to account for increase power production potential.

3%16%

47% 52%

2020 2021 2022 2023

M2 G1 M4 M6 M10 G12 Other

Zhonghuan’s Existing Capacity and Planned Capacity Increases PV Industry Wafer Size Distribution Forecast from Zhonghuan

The information herein has been prepared by CEA solely for the exclusive use of recipient. No representation, warranty or undertaking, express or implied, is made as to, and no reliance should be

placed on, the fairness, accuracy, completeness or correctness of the information or the opinions contained herein. Neither CEA or any of its affiliates, advisors or representatives will be liable (in negligence or

otherwise) for any loss howsoever arising from any use of this presentation.

Thank you

Company: Clean Energy AssociatesWebsite: www.cea3.com Email: info@cea3.com