Lack of financing <\/strong><\/p>\n\n\n\n During a recession, the liquidity levels are lower, hence the market shrinks. With less liquidity out there, there is less money to be put into projects. Moreover, investors tend to move their allocations into safe assets like fixed-income vehicles withdrawing their investments from riskier industries. <\/p>\n\n\n\n Low electricity demand <\/strong><\/p>\n\n\n\n As large investors tend to be cautious and withdraw their capital from less traditional markets, average citizens tend to spend less. This impacts energy consumption (like shown in the chart below) hence affects energy markets. <\/p>\n\n\n\n Although the renewable energy sector is protected by PPAs (Power Purchase Agreements), these prices are usually higher than market prices, which can also draw investors away. <\/p>\n\n\n\n Stranded projects <\/strong><\/p>\n\n\n\n In line with the previous point, small or newly released projects may never see the light of day. Financing is arguably impossible to get in such a context and, even if self-financed, a project owner may find other challenges. The cost of the materials increases and is usually in US dollars, which makes it difficult for projects that work with other currencies. In a recession, currency volatility can make it impossible for a project to face exchange costs. <\/p>\n\n\n\n This has been worsened during the coronavirus crisis due to transportation restrictions that generate even greater costs and involve delays. <\/p>\n\n\n\n Sources indicate that, since March 2020, there was a shortage of materials like inverters and modules which resulted in a 15-percent increase in prices. <\/p>\n\n\n\n Besides the negative predictions, the renewable energy industry is throwing good results in 2021. In April, the IRENA (International Renewable Energy Agency) released encouraging reports. IRENA\u2019s statistics show an increase in new generating capacity for the second year in a row. It reports a growth of 260 gigawatts in renewable energy capacity in 2020, exceeding 2019 almost by half. <\/p>\n\n\n\n This increase has taken place partly due to the underperformance of the fuel-energy sector. There was a net decommissioning of fossil power generation in Europe, North America, and Eurasia. This sector saw a decrease from 64 GW to 60 GW in 2020, in line with an overall bearish tendency. <\/p>\n\n\n\n Solar energy, in particular, is a worthy player in this increasing curve. It has reached nearly the same level as wind capacity. This is thanks to the expansion in Asian countries with a 45 GW increase in China and 11 GW in Vietnam. Japan added 5 GW while India and Korea added 4 GW. The United States increased its capacity by adding 15 GW. <\/p>\n\n\n\n The PV manufacturing industry has shown interesting tendencies. For a while now, a small group of players has controlled the polysilicon and monocrystalline wafer manufacturing. This consolidation is still growing, and this is reflected in statistics from the past years. <\/p>\n\n\n\n The market for module and cell construction has been historically more fragmented, however, this tendency is changing. While smaller participants used to take part in this niche, in 2020, their involvement seemed to be decreasing. <\/p>\n\n\n\n Some of the Chinese biggest players in the industry are taking over the module and cell construction markets. This is partly because the industry is gradually starting to use larger wafer formats, hence, small companies cannot afford the building costs. This opens the way for the PV industry giants, who have the means to build the wafers that the current market demands. <\/p>\n\n\n\n The next section presents an analysis of today\u2019s PV manufacturing industry and how to evaluate the manufacturers\u2019 competency in this context. <\/p>\n\n\n\n But how do we compare different market players based on parameters other than capacity and shipment? Fortunately, Exawatt has developed a ranking (Exawatt\u2019s Power Score and Power Ranking) to compare different module builders in the market. Nonetheless, a company\u2019s place in this ranking does not necessarily reflect the quality of its products. <\/p>\n\n\n\n The ranking is based on three parameters: PV presence, financial health, and profitability. <\/p>\n\n\n\n This point is assessed considering the module shipment and capacity growth over a This parameter is measured with the Altman z-score. It is used to forecast the probability This point is assessed with two parameters: operating profit as a percentage of revenue The\u00a0Exawatt\u00a0ranking\u2019s results don\u2019t surprise those who know the industry. Like we can see in the chart above, Longi<\/a> is sitting in the first place having a leading position in the three parameters. Longi is not only known for being the largest manufacturer in the world but also has a strong financial and profitability position.\u00a0<\/p>\n\n\n\n Longi has the largest capacity and shipment and boasts a healthy financial environment thanks to its rich wafer production. They have a significant wafer business and use their own wafers to build modules. This helps the company to reduce costs and remain competitive. Its operating margin was impressive even in the year of the coronavirus breakout. In 2020, Longi had an operating margin twice as large as that of many major Chinese manufacturers. <\/p>\n\n\n\n The second place was\u00a0earned by\u00a0JA Solar,<\/a> the only manufacturer (other than Longi) to achieve a positive score in all three parameters. Its PV presence was boosted by the company\u2019s major expansion regarding shipment and capacity.\u00a0<\/p>\n\n\n\n The ranking is followed by Jinko Solar,<\/a> Trina Solar<\/a>, and First\u00a0Solar\u00a0(third, fourth, and\u00a0fifth place\u00a0respectively). First Solar is one of the few Western PV manufacturers in the ranking. Its strongest parameters are profitability and financial health.\u00a0<\/p>\n\n\n\n DMEGC<\/a> is\u00a0in\u00a0sixth\u00a0place, which may come as a surprise to many. However, although its manufacturing levels are low (1.5 GW capacity in 2020), the company shows a robust position when it comes to financial health and profitability.\u00a0<\/p>\n\n\n\n In both parameters, DMEGC ranks quite higher than most competitors and this is mainly thanks to the company\u2019s devices business and magnetic materials. These features are highly coveted by investors and thus significantly improve DMEGC\u2019s market capitalization. <\/p>\n\n\n\n The ranking brings yet another surprise with two of the most reputable companies in the PV module industry in the lowest positions. GCL System Integration and Talesun are positioned in the 29th<\/sup> and 30th<\/sup> places from the 31 companies appearing on the ranking. Both companies scored negative points in all three parameters and position themselves below the overall average. <\/p>\n\n\n\n GCL reached a sales level amounting to nearly 3 GW in 2020, which is 17% less than in 2019 and 50% below the company\u2019s highest sale point in 2018. This consolidates a decreasing trend in its performance and creates a negative score for the PV presence parameter. <\/p>\n\n\n\n Despite being underutilized (GCL had a capacity of 7 GW in 2020), the company has expansion plans. There is a 15 GW module manufacturing facility due to come online this year. <\/p>\n\n\n\n Talesun is in a similar situation having shipped only 1.3 GW in 2020 (25% less than 2019). Nonetheless, the company recently added 5 GW of module capacity online, reaching a total capacity of 13 GW. <\/p>\n\n\n\n Thanks to these expansions, both companies will be able to build larger modules. Since the whole industry is shifting to the use of larger cells and wafers, this brings hope for GCL and Talesun. Maybe these conditions will help them climb a few positions in the Exawatt ranking for 2021. <\/p>\n\n\n\n Many PV module manufacturers are planning to expand their capacities in 2021 which may change the game for some of the main players. <\/p>\n\n\n\n Jinko Solar,<\/a> for example\u00a0(currently on position number three), may\u00a0fall\u00a0a few\u00a0places.\u00a0This is because\u00a0JA Solar <\/a>(2nd<\/sup>\u00a0place) and Trina Solar<\/a>\u00a0(4th<\/sup>\u00a0place) are planning major capacity expansions. If these plans turn out to be successful,\u00a0both companies can increase in presence and profitability thus\u00a0pushing Jinko out from the top three.\u00a0<\/p>\n\n\n\n But these are not the only manufacturers with expansion plans for 2021. Canadian<\/a>,\u00a0Elsewhere, and Risen Energy<\/a>\u00a0are some of the companies that may climb the ranking by\u00a0improving module capacity. Nonetheless, if Longi<\/a>\u00a0achieves its objectives this year and reaches\u00a0the targeted\u00a040-GW\u00a0module shipment level, chances are it will remain the\u00a0undisputed leader.\u00a0<\/p>\n\n\n\n It is widely known that the Covid-19 pandemic has affected the markets since March 2020 and its effects are still visible in 2021. The PV module industry is not the exception. Due to the numerous travel and movement restrictions, shipping costs have increased and are likely to continue like this for the rest of the year. <\/p>\n\n\n\n This may result in fragmentation and localization of a market that has been mainly controlled by Chinese players. This could mean the entrance of new companies in 2021\u2019s ranking, particularly from module manufacturers. <\/p>\n\n\n\n Exawatt\u2019s experts are also considering the market\u2019s major trends and their possible impact. From early 2019, they have predicted that n-type TOPCon and HJT technology would approach a cost-per-watt parity with p-type mono PERC in a near future. This would mean a major shift similar to the transition from BSF to mono PERC. <\/p>\n\n\n\n In 2021, the market keeps showing a TOPCon and HJT trend. Both small and large players are moving towards this technology. While small manufacturers are trying to make a difference and get a better position in the market, big companies are conducting pilot tests before launching mass-scale production. <\/p>\n\n\n\n In this context, we need to wait and see if the non-Chinese greatest brands like Panasonic or LG Electronics will be able to maintain a differentiating factor while their Asian counterparts transition towards TOPCon and HJT technology. <\/p>\n\n\n\n In the same line, we can ask ourselves whether early innovators in the n-type\u00a0cells\u00a0(like Jolywood<\/a>)\u00a0will thrive\u00a0or be overshadowed by the usual industry leaders.\u00a0<\/p>\n\n\n\n Also, the companies that move down the HJT road will have the opportunity to capitalize on the requirements for entirely new cells. This would create a more fragmented market and may pave the way for new companies to enter the rankings in future years. <\/p>\n\n\n\n The PV industry is facing many challenges in the post-Covid-19 world. Yet, as some things change, others remain stable. <\/p>\n\n\n\n The third decade of this century has brought unpleasant surprises. Shipment and polysilicon prices are volatile, and costs are increasing. Moreover, in times of recession, the demand for energy services is usually lower and the investors\u2019 confidence is diminished. Thus, it becomes harder for smaller projects to find financing and the big companies see their prices fall in the market. <\/p>\n\n\n\n But one thing seems to be consistent, and this is the global tendency towards a more sustainable future with the help of renewable energy sources. Installations are growing, companies are expanding their capacity, module efficiency continues to improve and, most importantly, innovations continue. <\/p>\n\n\n\n At the same time, some factors bring further uncertainty into the PV manufacturing industry. The movement towards new technologies, the increasing use of larger wafers, the fragmentation tendency due to movement restrictions and high shipping costs may change the ranking\u2019s layout in a not-so-distant future. There is also a high probability that the strongest players will continue to lead the way of innovation while the industry grows into developing highly efficient energy sources. <\/p>\n\n\n\n https:\/\/www.irena.org\/newsroom\/pressreleases\/2021\/Apr\/World-Adds-Record-New-Renewable-Energy-Capacity-in-2020<\/a><\/p>\n\n\n\n https:\/\/www.sc.com\/en\/trade-beyond-borders\/covid-19-clean-energy-challenges-and-opportunities\/<\/a><\/p>\n\n\n\n![\"\"](\"https:\/\/blog.solartraders.com\/wp-content\/uploads\/2021\/08\/image-2-1024x540.jpeg\")
![\"\"](\"https:\/\/blog.solartraders.com\/wp-content\/uploads\/2021\/08\/image-121-1024x607.png\")
The renewable energy industry during the Covid-19 pandemic <\/strong><\/h2>\n\n\n\n
![\"\"](\"https:\/\/blog.solartraders.com\/wp-content\/uploads\/2021\/08\/image-1.jpeg\")
Total solar capacity has reached practically the same level as wind capacity in 2020<\/em> <\/figcaption><\/figure>\n\n\n\nPV module manufacturers, the most important industry players in 2020 <\/strong><\/h2>\n\n\n\n
![\"\"](\"https:\/\/blog.solartraders.com\/wp-content\/uploads\/2021\/08\/image.jpeg\")
The graphic shows the top ten PV manufacturers in 2020 according to Exawatt <\/em>
<\/figcaption><\/figure>\n\n\n\nHow to measure and compare PV module manufacturers? <\/strong><\/h2>\n\n\n\n
Exawatt\u2019s Power Source and Power rankings parameters <\/strong><\/h2>\n\n\n\n
\n
certain period. It has a value of \u20182\u2019 in the ranking. <\/p>\n\n\n\n\n
for a company to go bankrupt in the next 2 years. This parameter is worth 1 point. <\/p>\n\n\n\n\n
and interest expense as a percentage of revenue in a trailing 12-month period. This
parameter is also worth 1 point. <\/p>\n\n\n\nThe top 5 industry players according to Exawatt\u2019s Power Source and Power rankings <\/strong><\/h2>\n\n\n\n
![\"\"](\"https:\/\/blog.solartraders.com\/wp-content\/uploads\/2021\/08\/image-3-1024x682.jpeg\")
Longi leads the ranking with the largest capacity and shipment volumes in the market <\/figcaption><\/figure>\n\n\n\nExawatt\u2019s Power Source and Power rankings: top 5 positions <\/strong><\/h2>\n\n\n\n
\n
Players looking for a brighter future <\/strong><\/h2>\n\n\n\n
Predictions for this year <\/strong><\/h2>\n\n\n\n
How N-type transition may influence the market in a near future <\/strong><\/h2>\n\n\n\n
PV manufacturers in 2021, a conclusion<\/strong> <\/h2>\n\n\n\n
References<\/strong><\/h2>\n\n\n\n