Companies such as 3Sun will likely lead in South Africa and Latin America,...

3Sun looks set to dominate South Africa’s thin-film market as part of a growing trend for manufacturers to focus on fewer, big-bet regions.

As previously reported in PV Insider, 3Sun panels will be supplying 65% of the power offered under the third round of South Africa’s Renewable Energy Independent Power Producer Procurement (REIPPP) programme.

But while thin film appears to have technical advantages in South Africa’s sweltering climate, so far no other manufacturer has claimed a significant win in the market.

Last year, sources confirmed that despite being active in the country, South Africa “is not really a top priority market” for Solar Frontier, one of the top two players in the thin-film industry.

The other, First Solar, has yet to win any projects and did not even bid in the third REIPPP round, although Nasim Khan, Vice President for Africa at First Solar, remains bullish about the prospects.

South Africa pursuits

“We remain committed to South Africa and continue to maintain a commercial presence in the market through our office in Cape Town,” Khan says. “We are confident that there will be opportunities and we will pursue these aggressively.”

In the meantime, though, the company is busy with a 52.5MW project in Jordan, another potential growth market. The Shams Ma’an win was announced in March and is the biggest PV project in the Middle East region after the 55MW Halutziot plant taking shape in Israel’s Negev Desert. Perhaps more importantly, First Solar faces a bonanza in its home market.

Bloomberg reported thin-film panel prices had risen to an 11-month high in the US after the imposition of new duties affecting Chinese PV imports from Taiwan.

NPD Solarbuzz vice president Dr Finlay Colville says 3Sun’s success in South Africa is essentially a result of its relationship to Enel Green Power, which holds shares in the manufacturer alongside Sharp and STMicroelectronics.

Enel contracts

“Enel got a bunch of contracts as part of the tender round and by default they are using the thin-film panels that are made at 3Sun,” says Colville.

Enel’s current strength in South Africa means 3Sun does not need to worry about other markets for the time being, he adds. “At the moment the 3Sun factory is effectively fully deployed in supplying Enel for the next couple of years, for large-scale solar parks in South Africa.”

Other thin-film players are similarly focusing on markets where they already have strong commercial positions. “Solar Frontier is not active anywhere apart from Japan,” Colville states.

“It doesn’t really matter what’s happening outside of Japan at the moment because they are sold out in Japan.”

Similarly, First Solar may be keeping a watchful eye on markets, such as South Africa, but probably has little incentive to push for projects there when it has plenty of business in other parts of the world.

Deploying panels

“They will pick and choose the countries they can deploy their panels to in the short term,” Colville says.

“They have a pipeline of projects, particularly utility projects in the US, and there they are the developer, the EPC [engineering, procurement and construction agent], or the owner. So why should they go after markets elsewhere where there might be lower returns on offer?”

What emerges is a picture where thin film’s success is increasingly a product of commercial relationships rather than technical or even economic differences with crystalline-silicon (c-Si) products.

Colville: “If a project developer has got business, and they decide their preference is to use thin film over crystalline for whatever reason, then you will see a spike in the thin-film market share. It’s not because somebody is doing a site-by-site comparison of thin film against crystalline.

“The technical advantage is very much secondary to who gets the business for a solar park, and do they have a relationship with a thin-film supplier, be it First Solar or Solar Frontier or 3Sun, who are the only three volume suppliers of thin film panels at the moment.”

Commercial relationships

The increasing importance of commercial relationships may partly explain First Solar’s declining presence in the Indian market.

Previously, the company had built its market share on the back of a presumed technical advantage plus funding help from the Export-Import Bank of the United States and an exemption from local content rules.

As the last two factors have fallen in importance, though, Indian developers have begun drifting towards c-Si, irrespective of any potential technical benefits for thin film.

The current trend could also make it easier to predict where thin film brands will dominate in future. Solar Frontier will clearly continue to be the market leader in Japan, and First Solar in the US. Hanergy, which is building a 3GW manufacturing plant, could predominate in China.

3Sun, meanwhile, will likely lead in South Africa and Latin America, places where Enel is strong.

It was recently reported that Sharp is relinquishing its 50% ownership in 3Sun to Enel through a share repurchase. Sharp, however, is expected to continue to cooperate with Enel on the downstream business side and buy modules under future EPC supply contracts.

Enel Green Power expects to use the 3Sun modules in projects planned for South America and South Africa and said it had a project pipeline in South Africa of over 300MW through 2018.