PV Book-to-Bill analysis forsees record revenues in 2011
Strong equipment backlog reflects optimism of tier 1 PV producers and a new cycle of investment in emerging thin-film technologies such as CIGS.
In the fourth quarter of 2010 (ending December 31, 2010), the PV Book-to-Bill posted a three-month average of 1.10, according to its analysis featured in the “Solarbuzz PV Equipment Quarterly Report”.
The Book-to-Bill ratio compares the total amount of orders received to the total amount of product shipped and billed within a given period. It is the ratio of demand to supply in the equipment supply chain. A PV Book-to-Bill ratio of 1.10 for Q4 2010 means that US$110 of orders was received by PV equipment suppliers for every US$100 of product shipped.
Across the entire year, the 12-month average in 2010 reached 1.27 compared to 0.97 for 2009.
According to Finlay Colville, Senior Analyst at Solarbuzz, "The latest PV Book-to-Bill figures reflect the ongoing investments across both monocrystalline silicon (c-Si) and thin-film segments, which are driving strong capacity expansions planned for 2011. Tier 1 c-Si manufacturers are expanding to reach vertically-integrated GW+ status on the back of still strong order books. Conversely, investments into a-Si (amorphous silicon)/mc-Si (microcrystalline silicon)and CIGS thin-film technologies represent the continued push by new entrants to find low-cost alternatives to First Solar's exclusive challenge to c-Si dominance in the market today."
Working closely with the PV equipment supply-chain, the Solarbuzz PV Book-to-Bill analysis maps out quarterly spending profiles by all PV manufacturers with the relevant bookings and revenues assigned to the appropriate process tool manufacturers.
The consolidated PV Book-to-Bill analysis yields an averaged figure based on industry-wide equipment investments across established and emerging technologies. However, tier 1 cell manufacturer trends can be a more appropriate leading indicator to assess the impact of production equipment used to meet end-market PV demand.
Colville added, "Tier 1 designated c-Si cell and thin-film panel producers satisfied 75% of PV demand during 2010. Equipment supply to this crucial midstream solar cell manufacturing segment highlights the portion of overall PV capacity expansion that is most likely to drive the level and timing of any panel oversupply during 2H'11."
For the tier 1 segment, the PV Book-to-Bill ratio was higher at 1.39 during Q4'10, with a 12-month average of 1.26. Early indications are that this segment's Book-to-Bill ratio will dip below parity during Q2 2011. This would represent the first sign of capacity expansion slowdown by leading PV producers and the beginning of a downturn in revenues on offer to leading PV equipment suppliers through 2H 2011 and 1H 2012.