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Strategic Analysis of the Chinese Market for Photovoltaic Chemicals and Materials
Frost & Sullivan, Dec 2010, Pages: 125
This Frost & Sullivan research service titled Strategic Analysis of the Chinese Market for Photovoltaic Chemicals and Materials provides an in-depth analysis of the market drivers and restraints, industry trends, and competitive environment in addition to the challenges and issues faced by market participants. In this research, Frost & Sullivan's expert analysts examine the following market sectors: wet process chemicals, metallic pastes, frontsheet, backsheet, and encapsulent.
Market Overview
Increasing Presence of Multinational Companies Spurs Growth in the Photovoltaic (PV) Chemicals and Materials Market in China
The dynamic Chinese market for PV chemicals and materials presents numerous growth opportunities. Trends indicate a surge in volumes of PV chemicals and materials with the proliferation of module manufacturing projects. China has emerged as a major hub for the manufacture of PVs, and major multinationals have set up units in the country. The production of PV cells and modules in China accounted for more than 40 percent of the global production. Growth was fuelled by on-grid projects and solar power systems, particularly in Ningxia and Jiangsu provinces. Renewable energy is gaining traction as China strives to address the needs of the large population in the rural areas that are not connected to the electrical grid. “Incentives by the Chinese Government have helped boost prospects for the PV industry,” notes the analyst of this research service. “The Solar Rooftops and the Golden Sun programs drove China's solar market in 2009.”
While the economic slowdown did prove to be a growth bottleneck for the market in 2009, effective policies launched by the government and the recovery of markets overseas in 2010 have helped improve the market growth rate. However, intensifying competition is exerting pressure on chemical and material suppliers to reduce prices and maintain reliable capacity and inventory to meet increasing end-user demands. Strong competition will remain a challenge for suppliers as more participants enter the fray.
Currently, the high end of the Chinese PV chemicals and materials market is dominated by MNCs that have developed a robust distribution network. Numerous domestic tier 3 manufacturers operate at the low end of the PV chemicals and materials market. To improve the efficiency of PV modules, high investments in R&D are required. For tier 1 companies, this is a key success factor as it enables product distinction. Smaller companies lack the financial wherewithal for R&D to scale up innovation into commercial production. “Technology improvement is critical in the PV chemicals and materials industry, especially for materials such as backsheets and encapsulants,” says the analyst. “Technical service is also an important strategy to build customer loyalty.” Supplying high-quality products with complete technical service will ensure business progression for the PV chemical and materials suppliers in China. Participants in this space must also ramp up supply chain management for successful business outcomes.
Market Sectors
Expert Frost & Sullivan analysts thoroughly examine the following market sectors in this research:
- Wet process chemicals
- Metallic pastes
- Frontsheet
- Backsheet
- Encapsulent
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