Information and analysis firm IHS has warned that, as a result of rapid solar installation growth in 2015, the US might encounter a potential solar wafer supply shortage in 2016.
In a IHS Research Note sent out on Thursday, IHS warned that there could be “a potential solar wafer supply shortage throughout the entire supply chain” in 2016, despite the recent announcements of large capacity expansions from leading module suppliers.
“There is increasing likelihood of a potential shortage of tariff-free solar cells in the United States, and several cell and wafer producers are already warning of a potential wafer supply bottleneck in the coming months,” IHS warned. The increase in global demand — which has escalated year after year, increasing 33% in 2015 to reach 58.7 GW, and which is expected to increase again to 65.5 GW in 2016 — has first affected solar module manufacturers, but is now trickling back up the supply stream, affecting first cells and wafer producers, and now, in the third quarter, polysilicon producers as well.
Unfortunately, though there are expansion plans in the works, IHS believes that the wafer industry’s capacity expansions will not keep pace with the global demand for solar, due in part to the more capital intensive cost of wafer production expansions.
A need for higher efficiency products has also placed a strain on the supply stream, with IHS claiming that a “large proportion of installations in 2015 require modules at 255 Watts and greater, which use high efficiency wafers.”
IHS believes total wafer production will reach 72.2 GW in 2016, which it believes “could be insufficient to meet demand.”
If demand is to be met, the top 10 producers are going to have to step up, producing 43 GW in 2016. However, IHS is predicting the total production capacity of the top 10 will only reach 36 GW in 2015, meaning a hard road ahead in 2016, especially considering only two companies are currently planning to increase their capacity in 2016 — GCL by 1 GW and Longi by 500 MW, creating a 5.5 GW shortfall.