Due to the explosive demand for solar energy, El Segundo, Calif.-based market research company iSuppli Corp is predicting that worldwide investments in the production of photovoltaic (PV) cells will rise to the same level as those for semiconductor manufacturing by 2010.

The company expects global production of PV cells to rise to as much as 12 Gigawatts (GW) by 2010, up from 3.5GW in 2007.

Also by 2010, iSuppli predicts that there will be as many as 400 global production lines that can produce at least 1 Megawatt (MW) of PV cells per year, which would be a four-fold increase from the approximate 90 to 100 production lines running in 2007.

Factories capable of 1GW of annual PV production will be established with the aim of ensuring continued strong delivery of PV cells to the market, the company noted.

“The market for PV cells is estimated to grow by 40% annually until 2010, and 20% beyond. Nearly all market participants plan to increase their sales by a Compound Annual Growth Rate (CAGR) of 40 to 50% during the next few years,” explained Dr. Henning Wicht, senior director and principal analyst for MEMS and photovoltaics at iSuppli, in a statement.

Heavy investments will be required to finance the expansion of PV cell production with each PV factory requiring an investment of $500 million and more, employing as many as 1,000 workers per site, and generating annual revenue of $1 billion per year or more, putting them into the size, cost and employment range of semiconductor fabs, Wicht also noted.

Growth of PV market driven by several factors

While the high price of oil and surging energy prices fuel demand for solar power in the short term, demand will not wane in the years to come, Wicht believes, particularly given that projections show the world will need 3 to 4 times more electrical power over the next 50 years to support continued growth in population and economic output.

And according to the German Advisory Council On Global Change, by 2100, 80% of energy must be generated from renewable sources, he pointed out.

In addition, PV cell makers have affirmed that PV cell production will become cheaper in time, as PV cell makers Q-Cells AG and REC Group said they expect a reduction in PV system costs by 40% from 2006 to 2010.

iSuppli believes that with these cost reductions, many regions in the world will soon reach grid parity, which is the point when PV electricity costs the same or less than power derived from the electrical grid. PV grid parity is expected beginning 2012 in nations where sunshine is plentiful and constant, and 2018 in areas of the world with adequate or medium sun exposure, the market research company concluded.

To be sure, solar is such a hot area for development these days, even major semiconductor players are not being left behind. Just last week, both Intel and IBM separately made moves in the solar energy market.

By: DocMemory
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