Salam sejahtera

and greetings from

Malaysia

Solar photovoltaic (PV) industry has been growing

exponentially and excitingly over the last ten years. PV
companies which were started pre-millennium, were
mostly very small with less than ten employees. But
today their market values are in billions with hundreds
of staff all over the world. Still, their future prospects
are as bright as the SUN.

Recognising the opportunity, on 18th August 2006, the

YAB Prime Minister of Malaysia launched the Third
Industrial Master Plan (2006-2020), with solar PV
identified as one of the focus technology. Through the MBIPV Project, Malaysia is pedantically
building the right infrastructure to create a sustainable PV market, and a strong local PV industry.
The emphasis towards local industry is to enhance the service quality and establish successful PV
manufacturers.

To achieve these goals, MBIPV Project is currently working with MPIA to set up a competency
based PV training programme, and a quality scheme called ‘Approved Service Provider’ (APVSP).
We aspire for our local PV service providers (PVSP) to provide quality services locally and beyond
Malaysia. As such, we offer opportunities for our PVSP to hone their skill through the National
SURIA 1000 programme.

We also invite international PV companies to collaborate and work with our property developers
through the ‘SURIA for Developer’ programme. Our aim is to create the first property development
which incorporates BIPV as a standard feature, to achieve our PM’s aspiration of Wawasan SURIA.

We are also working very closely with MIDA to make international PV manufacturers to select
Malaysia as the preferred location for their manufacturing facilities. Malaysia can provide many
attractions that can make any decision to relocate to Malaysia as a wise decision. But, our challenge
has always been to create adequate awareness of what Malaysia can offer.

Therefore, it is my greatest wish to see the Malaysia PV Industry Days become a fruitful platform
for international and local PV partners to find business opportunity, and to facilitate your plan to
establish PV manufacturing facilities here in Malaysia.

Ir. Ahmad Hadri Haris

National Project Leader, MBIPV Project
August 2007

PV Industry Magazine August 07 3

 3 Message from National
C Project Leader, MBIPV Project –
Ir. Ahmad Hadri Haris

O 6 Message from President of

MPIA – Shamsudin Khalid

N 9 Global and National Photo-

voltaics Business – Daniel Ruoss

16 Local and Global

T Manufacturing Opportunities in
Photovoltaics – Daniel Ruoss

E 21 The PV Industry Value Chain

– An International Snapshot
– Greg Watt

N 25 Latest PV Business News –

Daniel Ruoss

T 28 Market Movers of Solar

Photovoltaics in Malaysia –
Wei-nee Chen

S 31 Overview of Japan’s PV
Industry – Izumi Kaizuka

33 Global PV Industry
Development Since 15 Years –
Daniel Ruoss

About us
MEDIA SPONSOR SPONSORS
(www.roofandfacade.com)
• Bandar Eco-Setia Sdn Bhd
FrontMedia Network Sdn Bhd • Envision Sdn Bhd
Julie Chong Cheng Sim • HUBER+SUHNER (Malaysia) Sdn Bhd
julie@medialink-mail.com
• Malaysian Industrial Development Authority (MIDA)
Dr Parvathy Subhadra
paru@medialink-mail.com • Mitsubishi Electric Asia Pte Ltd
• Malaysian Photovoltaic Industry Association (MPIA)
Benjamin Ng
ben.ngha@gmail.com • Multi-Contact (South East Asia) Pte Ltd
• OC Oerlikon Balzers Pte Ltd
Pamela De Silva
production@medialink-mail.com • Pegasus Business and Market Advisory Sdn Bhd
• Phoenix Solar Pte Ltd
MEDIA CONTRIBUTORS • Solamas Sdn Bhd
Ir. Ahmad Hadri Haris; Daniel Ruoss; Wei-nee Chen; • SolarWorld Pte Ltd
Malaysian Industry Development Authority (MIDA); • Sputnik Engineering AG
Greg Watt; Izumi Kaizuka; Shamsudin Khalid • SunTechnics Pte Ltd

4 PV Industry Magazine August 07

 Dear Industry Members,

The Malaysian Photovoltaic Industry Association

or MPIA was formed to bring industry players
together to develop and expand the photovoltaic
(PV) market in Malaysia. It also seeks to bridge the
industry and policy makers, acting as the industry’s
voice, seeking to propel the industry forward in a
positive manner.

Though Malaysia, in general, is highly accessible

to grid power, still there remain many rural areas
suffering from unavailability of electricity even today. Since the launch of 9th Malaysia Plan,
much has been said about solar applications, especially solar hybrid systems. Solar PV
awareness has also improved significantly, particularly at governmental levels and with the
general public. The implementation of the Suria 1000 programme will further help propagate
this understanding.

The MPIA hopes that this development will bring about an expansion of the PV market.
Inconsistent quality of past installations has added to the perception that solar is not only
expensive but also unreliable. The MPIA seeks to rectify this notion and improve the situation
by assisting the industry to ensure quality for the systems being applied. Tax and duty issues
continue to hinder competitive pricing when compared with more established markets in
Europe, Japan, or the US.

The MPIA looks forward to the abolishment of duties and sales tax for relevant components
of PV systems. Lower prices will certainly go towards motivating an even larger portion of
the population to adopt PV as their way of contribution to the environment preservation.
With this in mind, we look forward to further adoption of photovoltaic (PV) power in both
commercial and government projects in the near future. We look forward to bright and sunny
days ahead.

Shamsudin Khalid
President
Malaysian Photovoltaic Industry Association

6 PV Industry Magazine August 07

 MALAYSIAN PHOTOVOLTAIC
INDUSTRY ASSOCIATION
The Driving Force & Voice of Malaysian Photovoltaic Industry…..

FORMED in the Year 2006, Malaysian Photovoltaic Industry Association, MPIA, is committed to bring
effectiveness and sustainability in the implementation of Photovoltaic Technology for successful &
reliable Renewable Energy Projects implementation in Malaysia with consistent quality control.

OBJECTIVES & GOALS OF MPIA:

1. Be a Resource Centre for the Photovoltaic Industry Stakeholders.

2. Be the Watchdog in the implementation of various PV Projects to ensure Quality.
3. Provide Training and Workshops for its Members to enhance competency.
4. Be the Voice of the Industry for Government and Policy makers.
5. Create Awareness of PV potential among the Organisations and General Public.
6. Make technical recommendations or set standards to avoid inconsistent quality in PV projects.
7. Set up a One Stop Centre for PV, Stand Alone & Grid Connected. The Centre would benefit the
Industry stakeholders/ PV Service Providers as well as for the PV system users and of course the
General Public.

The PV Technology is a renewable energy solution that helps us in energy conservation to combat
Global warming and Climate change. With support from all the stakeholders, MPIA can become
instrumental in ensuring PV to be an effective and sustainable solution.

MPIA ENVISIONS COST EFFECTIVE AND RELIABLE PV INSTALLATIONS

MPIA COMMITTEE MEMBERS (2006-07):

Standing from Left: Mak Hong Seng (Putra Perdana),

Kenneth Chang (Mitsubishi Electric), Udupi Krishna
Kumar (Matrix Energy) and Paul David Millot (Australian
Solarvoltaic)

Sitting from Left: Lionel Yap (Solamas), Shamsudin

Khalid (Sharp-Roxy), Zairul Azren (Matrix Energy) and
Sivaganthan J. (Bestium Technologies)

SECRETARIAT
PERSATUAN PERUSAHAAN FOTOVOLTAIC MALAYSIA
Unit 510, 5th Floor, Block A, Kelana Business Centre,
No.97, Jalan SS 7/2, Kelana Jaya, 47301 Petaling Jaya,
Selangor Darul Ehsan
Tel : +603 78809499, Fax : +603 78809433
Email : sivag@bestium.com.my, aznura@bestium.com.my
Web Page : www.mpia.org.my
 Global and
National
Photovoltaics
Business

Global and National

Photovoltaics Business
due to bottleneck in silicon supply.
By Daniel Ruoss, The fact is that the PV market Cost (estimated in US$ billion)
International Consultant is growing rapidly! The following
Cost for FiT = 4.4
MBIPV figures presented are based on
research and comparing data from Increased cost for stand-by
REN21, Photon International, IEA- charges = 0.14
15 GWp (source: PVPS, Greenpeace, Paul Maycock,
Photon
International) or 7 GWp (source: and others. In the last seven years Transaction cost = 00027
EPIA) cumulative installed PV the overall PV market was growing
capacity by 2010? More than 1 GWp between 35% to 42%, and grid- Total = 4.54
(source: Photon International) connected PV exceeded 40% growth
Benefit (estimated in US$ billion)
installed capacity in Germany in in the last five years. The grid-
2006 or 750 MWp ‘only’ (source: connected PV market accounts for Reduction of tariff for VL
International Energy Agency approximately 77% (~5.6 GWp as at consumers (Merit order effect) = 6.87
Photovoltaic Power Systems end of 2006) of the overall installed
Programme, IEA-PVPS)? Correct PV capacity and is the fastest Savings from energy import = 1.237
values are of great importance and growing RE market worldwide. 23%
provide the industry verifiable (~1.7 GWp as at end of 2006) are off- Socio-economic benefits - 4.672
means of benchmarking and grid PV systems and few
planning of the production. (approximately 5%) are already Total = 12.8
Unfortunately today the values for installed economically viable
forecast and even annual installed without the need for subsidies. The Table 1: Cost vs. benefits of EEG in
Germany (Source: BMU, June 2007)
capacity are in dispute, e.g. rest (~18%) receives financial
European PV Industry Association support from NGOs, donor countries through aid program, from donor
(EPIA) vs. Photon agencies, such as United Nations
International, a leading Programmes (e.g. Development or
PV magazine, and the Educational), Global Environment
IEA-PVPS, where data Facility (GEF) or World Bank. By
is often very End of 2006 the cumulative
conservative compared installed PV capacity was
to Photon International approximately 7.2 GWp resulting in
figures. The IEA-PVPS total annual revenues in 2006 of
covers member US$ 12-13 billion (RM45 billion).
countries only and is But we have to keep in mind that
strongly depending on the grid-connected PV market,
individual country although booming like mushrooms,
expert (often only one) the PV growth is completely driven
to provide accurate by sustainable policies implemented
data. by governments in various
Market size matters countries, such as Germany, Spain,
– the industry and other USA, Italy, France, South Korea,
stakeholders have to Greece, and others. In fact, it is not
know the status quo of the industry that is driving the
the market to plan for market but politicians with
the mid and long-term. commitment and a long-term
Presently one has to use perspective for a sustainable future.
the published data with Policy driven programme helped
care and compare with the global PV industry to expand
one or two other sources quickly and position itself stronger
c l o s e l y. F u r t h e r m o r e , against conventional energies. As at
one should compare mid of 2007, the PV industry has
statistics for installed created more than 300,000 new jobs
PV with the annual PV worldwide (source: Greenpeace),
production. Production whereas in Germany alone
will follow demand and approximately 50,000 jobs were
in 2007, production created (source: Bundesverband
should meet demand, Solarwirtschaft BVS). It is
whereas in the last few Governor Schwarzenegger – a committed PV estimated that in Germany by 2020,
years the demand was champion with muscles to implement a sustainable jobs created in RE manufacturing
exceeding production, PV programme in California. • See page 11

PV Industry Magazine August 07 9

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• From page 9
will exceed those in machinery and
in vehicle manufacturing! PV and
RE in general, is a job spinner and
brings great benefits to the country.
But we need to ‘fuel’ this spinner,
and the ‘fuel’ today is a well
designed, economically viable feed-
in-tariff (FiT) policy. Today more
than 40 countries have a FiT policy
introduced. Some country
programmes offer an economically
viable FiT, e.g. Germany, Spain,
South Korea, Italy, France, Greece,
and many more. Other countries
have a FiT but either timeframe of
FiT is too short (e.g. Thailand –
7 years only), or the cap on
the maximum cumulative installed
PV capacity is set too low
(e.g. Switzerland, Portugal,
Luxembourg), or the available tariff
is too low to make the PV system
economically recoverable within the
15 to 20 years (e.g. Norway, Sweden,
Turkey, and other countries).
But a well designed feed-in tariff implementing a FiT scheme
scheme is a policy to change the
world. FiT reduces CO2 emission
Graph 1: Investment trends for manufacturing along the PV value chain.
Graph 2: Profit trends for manufacturing along the PV value chain.
Figure 1: 10.5 kWp semi-transparent BIPV
application at PTM-ZEO.
significantly, create jobs, ensures
energy s u p p l y, guarantees per August 2007 grid connected PV
investment security and grows the
local PV i n d u s t r y, drives benefits:
technological innovation and
provides fair market conditions for
REs. The question is “Do the
benefits for the country
outweigh the cost resulting from the
FiT policy?” Where do the billions
Global and
National
Photovoltaics
Business
i n v e s t e d g o t o ? Ta k e
Germany as an example,
Germany has a well
designed FiT pro-
gramme, including wind,
biomass, PV, hydro and
geothermal. The pro-
gramme started in 2000,
and in a recent review it
was presented that the
benefit so far outweighs
the cost (source:
Bundesministerium für
Umwelt, Naturschutz
und Reaktorsicherheit,
report on EEG
experience, June 2007).
And what is the
status of PV policy in Malaysia? As
in Malaysia enjoys the following
• Permission to connect such power
generating equipment to the
TNB’s low voltage distribution
supply network (240/415 volts 1
phase / 3 phase).
• Net Metering for TNB “purchase”
of the PV generated electricity,
where the interconnection may be
at the point of TNB supply
connection (“Direct Feed”) or at
the user ’s internal distribution
board (“Indirect Feed”). Under
these conditions the PV generated
electricity sale equates to TNB
valuing the PV generated
electricity at the same rate it sells
the electricity to its customers.
• Accelerated Capital Allowance
(ACA) for commercial investors in
BIPV installations under the “RE
for own use” category of SREP
fiscal incentives.
In the pipeline; MBIPV project
through the Ministry of Energy,
Wa t e r a n d C o m m u n i c a t i o n , h a s
proposed for PV incentives to be
enhanced through the National
Budget, to make it more attractive
for Malaysians to invest in PV
systems.
Over the last two years the
annual installed PV capacity in
Malaysia was in average 1 MWp to
1.5 MWp including off-grid PV
applications, which represent
approximately 70% of the total
i n s t a l l e d P V c a p a c i t y. S e v e r a l
initiatives in off-grid PV
application, such as ‘Schoolnet’, or
island electrification with hybrid
systems (Pulau Kapas), or projects
for rural electrification in Sabah
and Sarawak, initiated mainly by
Government agencies and TNB.
To d a y grid-connected BIPV
applications are under the
• See page 12
PV Industry Magazine August 07 11
Global and
National
Photovoltaics
Business
• From page 11 potential for grid-connected PV in
supervision of MBIPV Project and the built environment was
concentrating mainly in the Klang estimated (in 2003) to be at least
Valley due to better appreciation of 6500MWp.
the technology by the urbanities. It is important when developing
But in SURIA1000 and also the the market and its stakeholders, to
‘SURIA for Developer ’ programmes, follow a realistic learning curve and
BIPV applications can be installed to address the current industry
in East and West Malaysia and capabilities in the design of a policy.
receive, if successful in bidding, The scenario for post MBIPV (2010
Graph 3: Global PV market outlook (Source: Own estimations based on EPIA,
REN21, Greenpeace, Photon International)
attractive financial incentives for onwards) proposes that the
the investment and the BIPV Malaysian PV industry (service
systems are allowed net metering providers and manufacturers)
with TNB and later on, with SESCO should become competitive before a
and SESB. In August 2007; the grid- follow-up high-impact (e.g. feed-in
connected cumulative installed tariff) PV programme is introduced.
BIPV capacity in Malaysia Otherwise, Malaysia will not
surpassed the 600 kWp level and benefit from the investment into PV
the off-grid market is estimated to and justification for the PV program
be 5-6 MWp cumulative installed to benefit the local stakeholder is
PV capacity. very difficult. The PV industry has
Besides the proposed changes to two to five years (2010 to 2012/
the various Government agencies on 2015) to build capacity and become
procedures to facilitate RE PV competitive in the local and
growth, MBIPV is working towards international market. This follows
a sustainable environment for the a realistic scenario similar to
widespread use of grid-connected lessons learned from Germany, US
PV in Malaysia. The realistic target and Japan.
until 2020 is to install 20 MWp The market in Malaysia will
cumulative installed grid-connected develop in due course, although it
PV capacity, however the technical may not be as fast as in Europe but
hopefully more stable
than in other Asean
countries, e.g.
Thailand, Indonesia.
Off-grid PV will be the
majority of PV
applications and may
exceed 2 MWp annual
installed PV capacity
by 2010 onwards due to
increasing support
from Government on
Figure 2: Characteristics of the PV value chain (Source:
rural electrification,
Pegasus Sdn Bhd) but will dwindle as
Malaysia becomes a
12 PV Industry Magazine August 07
developed nation by 2020 (Wawasan
2020). In Sabah and Sarawak, few
are still without access to proper
electricity supply.
Off-grid applications are an
important and still growing sector
of PV business, in many cases very
depending on Government support,
but in some cases already
economically viable without any
Government subsidy. For example
in Indonesia, where the PV market
has been revitalized for the past two
years, thanks to strong demand of
PV hybrid solution for
telecommunication application on
hundreds of islands. And just few
years ago, a Government sponsored
solar-home systems programme in
Indonesia failed because no
ownership was created (100 percent
subsidized) and very poor
maintenance was provided. In an
economical viable market such as
telecommunications, the growth
and demand for PV becomes self-
driving and this makes PV business
a profitable venture.
The entry barrier for PV
business varies, depending which
part of the value chain one targets,
the investment can be up to several
hundreds million Dollars. Becoming
a PV system integrator or proving
service in design, consulting, and
other activities is with the least
barrier path to PV business. As
such, companies can easily fly by
night and may be gone the next day
to the next attractive PV market
with cash. Similar to module
manufacturing, which requires
minimal investment - for a 10 MW
production facility US$1.1-1.7
million (RM4-6 million) – and can
be set-up and operated quickly, but
can be also dismantled and
relocated fast. The scene is different
if one targets front end
manufacturing, such as polysilicon
production, ingot and wafer
fabrication or cell manufacturing;
this can incur investment cost
between US$70 to 125 million
(RM250 up to RM450 million) for a
100 MWp production facility. Graph
1 presents investment trends for
different PV products in the value
chain. Please note, this graph
should not be used for any design
of business plans as it presents
trends only.
One could compare the
investment in the different sectors
with the trends in profits (see graph
2). On a normalized scale (100%),
polysilicon and ingots/wafer
manufacturing tend to achieve the
• See page 14
Global and
National
Photovoltaics
Business
• From page 12
highest profit followed by solar
cell manufacturing. Module
manufacturing tends to result in
less profit than the upstream
manufacturers but profit still
exceeds those in BOS manu-
facturing or services sector
(installation and consultation).
Yes, the future is promising for
PV business. Established PV
companies are expanding
significantly their production
capacity and numerous new
companies are entering the PV
business worldwide.
In some business, e.g. inverter
and module, competition is
aggressive and almost every month,
new market entrants are trying to
get a share of the booming PV
market. But before one rushes
heedlessly into PV business, one
has to understand and consider
some important (but not limited)
requirements:
• Company should understand the
PV value chain and the market
drivers and have a regional or
international network for
procurement and sale of products.
• Establish strong collaborations
with experienced partners, e.g.
JV, technical collaboration (MoA),
and others.
• Succeed in long-term supply
contracts of your raw product.
• Have reliable power supply, low
electricity tariff and good access
to talented manpower.
• Reduce dependence on export
market only. Create a sustainable
local home market.
It is crucial to do extensive due
diligence on market and close
competitors. Furthermore, one has
t o a s s e s s o n e ’s o w n f i n a n c i a l
capabilities, preferred location,
infrastructure, accessibility to
ports, etc. and come up with a sound
SWOT analysis leading to decisions
before venturing into PV business.
Support on above analysis can be
obtained from several international
and local consulting companies and
also from MBIPV team. Please feel
free to contact any of the MBIPV
team, if your company has the
resources to invest in PV (see graph
1) and if you are interested to enter
or diversify to the PV business in
Malaysia. Also, please visit
www.ptm.org.my/bipv to download
our facts & figures on business
opportunities.
Looking ahead, for front-end
products (e.g. solar cells, wafers),
14 PV Industry Magazine August 07
profit tends to be high and for PV
module manufacturing profit tends
to decrease slightly, because any
cost reduction is used to maximize
to a certain level the profit for the
front-end manufacturers first.
In 2007, FOB (free on board)
sales price for high quality
crystalline PV modules from China
ranges from US$3.20-3.80/Wp
(RM11.5-13.7/Wp) for an order of
around one to five 40ft containers
(100 to 500 kWp). Production cost
is estimated at US$2.60-2.80/Wp
(RM9.4-10.1/Wp), which result in
profits of 20-35% for module
manufacturing.
In a few years, due to decreasing
silicon prices the module production
cost should decrease as the cost
reduction in silicon manufacturing
is passed on through the PV value
chain. Photon International
Consulting estimated production
cost of high-quality crystalline PV
modules in 2009/2010 in the range
of US$1.50/Wp (RM5.4/Wp).
Cost reduction in end products
will open new PV markets and add
to the increasingly attractive
business environment. This leaves
plenty of room for future growing
profit and new companies entering
the PV business.
Here, an increasing number of
companies are targeting the fast
public listing to attract quick cash
and achieve their aggressive and
ambitious growth targets, e.g.
Chinese companies.
Other companies are attracting
venture capital or private equity to
fund their business strategy and a
few PV companies are closed for
outside investment and still
perform very well.
There are different approaches;
each with its benefits, to diversify
into PV business, either way the
question for new market entrants is
often “where to enter the PV
businesses”.
As presented in figure 2, in back-
end manufacturing (PV modules,
BOS) and system integration, an
increasing numbers of players are
established and investment is low,
whereas in silicon manufacturing
only few companies dominated the
market, but investment is very
high. Wafer and PV cells production
requires a high investment but less
than silicon, but competition is
getting stronger as more companies
establish in this sector of the value
chain.
But there is plenty of business
available considering a BAU
(business-as-usual) scenario (35%
growth rate) for the development of
the global market – see graph 3.
The annual revenues in 2010 are
estimated to exceed US$40 billion
(RM150 billion) and could reach
US$380 billion (RM1,400 billion) in
2020 estimating an annual market
of 120-140 GW – replacing over
hundred to hundred fifty big size
nuclear reactors installed per year.
For reference and to provide a
perspective on the potential market
size of PV; in 2007 thirty three
nuclear reactors were under
construction totalling 27 GW.
How are we going to get there?
By economies of scale and new
developments – upscaling and
commercializing new technologies
are keys to price reduction and
further market growth.
In the next few years the
spotlight will be on the European
and US market, and demand will be
high thanks to Governments which
understood the benefits of an RE
policy (including PV) and hence,
coming up with a long-term
perspective to achieve a sustainable
national energy policy.
In the next two to three years,
the industry should try to
consolidate, as today the market is
overheated, and this will help
companies to improve their
strategies over the next ten years.
We will have more IPO’s, new
partnerships between established
PV enterprises and newcomers to
tap into the network and experience
from a strong industry partner,
some bankruptcies may be possible,
several companies with idling
production equipment and few
mergers & acquisitions.
To d a y t h e h y p e f o r P V
technology and business is at its
peak, and the PV industry should
be mindful to use the momentum
and carry the positive support from
the public and Government into a
long term sustainable business.
Once grid-parity is achieved i.e.
PV electricity price is competitive
to conventional energy generation,
the PV market will sky-rocket and
open avenues for new technologies
and innovative manufacturing
concepts to upscale. The industry
has to drive the market in the short
to mid term and not policy makers,
who today have strong muscles
(commitment) to support PV, but as
we all know muscles tend to weaken
over time.
Local and Global
Manufacturing
Opportunities in
Photovoltaics
Local and Global Manufacturing
Opportunities in Photovoltaics
By MIDA (Malaysian
Industrial Development
Authority) and Daniel
Ruoss, International
Consultant MBIPV
Malaysian Industrial Development
Authority (MIDA) is Malaysia’s
one-stop centre for local
manufacturing. With focus on PV
business, MIDA is supported by Mr.
Daniel Ruoss and Mr. Mohd Nazri
Mohd Nawi from the MBIPV team to
facilitate international and local
business contacts and provide updates
on latest technologies and companies’
news. MBIPV team is very experienced
in the PV business along the value
chain and familiar with local and
international PV stakeholders. To
facilitate the growing interest from
local companies, we have designed a
business development program,
including free consultation and
business plan. To upgrade local
industry and support their business
interest, we have designed our
programme in six thrusts:
T1: To understand the needs and
requirements of the local industry;
T2: To improve the image of the local
PV industry and PV in Malaysia;
T3: To stimulate interest and identify
interested local companies to shift
towards PV;
T4: To design tailored programmes to
enhance local industry;
T5: To explore Government support
and collaborate with relevant
agencies on design for new
incentives
for industry development; and
T6: To guide and facilitate
collaboration between industries
(local and foreign).
Together with MIDA we are
working towards local manufacturing
of PV products serving the global
market and establishing strong local
service providers competent to operate
business in the ASEAN region. Please
feel free to contact MBIPV team any
time. Contact: Mr Nazri
(Nazri@ptm.org.my)
The role of MIDA can be presented
as follows:
The Malaysian Industrial
Development Authority (MIDA),
incorporated as a statutory body under
16 PV Industry Magazine August 07
Figure 1: Leading PV players in Eastern Germany
the Federal Industrial Development
Authority Act, 1965, is the
Government’s principal agency for the
promotion and coordination of
industrial development in Malaysia.
MIDA is the first point of contact for
investors who intend to set up projects
in the manufacturing and its related
services sectors in Malaysia. Foreign
investors can also contact MIDA for
assistance in planning their fact-
finding trip to Malaysia.
Headquartered in Malaysia’s capital
city of Kuala Lumpur, MIDA has
established a global network of 16
overseas offices covering North
America, Europe and the Asia Pacific
to assist investors interested in locating Department of Occupational Safety and
manufacturing operation in the
ASEAN region. MIDA will be opening
10 new offices in Guangzhou, Dalian,
Bangalore, Ho Chi Minh City, Jakarta,
Dubai, Johannesburg, Munich,
Bangkok and Houston, by the end of
this year. Within Malaysia, MIDA has
10 branch offices in 10 states, including manufacturing sector. For further
two offices in Sabah and Sarawak.
The main functions of MIDA are to:
• Undertake planning and co-
ordination of industrial development
in Malaysia;
• Promote foreign and domestic
investments in the manufacturing
and services sectors;
• Recommend policies and strategies
on industrial development to the
Government;
• Evaluate applications for manu-
facturing licences and expatriate
posts; tax incentives for manu-
facturing activities, tourism, R&D,
training institutions and software
development; and duty exemption on
raw materials, components and
machinery;
• Assist companies in the
implementation and
operation of their projects,
and offer assistance
through direct
consultations and
cooperation with the
relevant authorities at both
the federal and state levels
and;
• Facilitate cross border
investments and assisting
Malaysian companies to
identify markets and
investment abroad;
• Facilitate the exchange of
information and coordination among
institutions engaged in or connected
with industrial development.
As a measure to further enhance
MIDA’s role in assisting foreign and
domestic investors, senior
representatives from key agencies are
stationed at MIDA’s headquarters in
Kuala Lumpur. These officials are from
the Immigration Department, Royal
Customs Malaysia and Tenaga
Nasional Berhad. Other Government
representatives from relevant
ministries such as the Ministry of
Finance, Ministry of Human Resources,
Department of Environment and
Health, are also assigned to MIDA to
assist in expediting various approvals.
MIDA has successfully implemented
the ISO 9002 Quality Management
System and has been awarded for the
promotion of foreign and domestic
investments in Malaysia’s
enquiries, please contact us at:
Malaysian Industrial Development
Authority
Block 4, Plaza Sentral, Jalan Stesen
Sentral 5, Kuala Lumpur Sentral,
50470, Kuala Lumpur, Malaysia. Tel:
(603) 2267 3633 Fax: (603) 2274 7970
E-mail: promotion@mida.gov.my
MIDA with support from MBIPV is
enhancing and attracting international
PV companies to establish
manufacturing in Malaysia and enjoy
the numerous benefits and advantages.
First success story of local PV
manufacturing exceeding 10 MW is
First Solar, a leading US company in
thin film module production. First
Solar is establishing a 220 MW
• See page 17

• From page 16
production facility in Kulim High-
Tech Park, Malaysia. Currently the
production facilities are under
construction and production should
be operational in mid 2008. Other
local manufacturers in PV products
cover the production of garden lamps
(up to 50,000 pieces per month) and
street safety products for Middle East
countries. Malaysia has many
opportunities for local manufacturing
and such opportunities have yet to be
explored and understood by global PV
companies. Today semi-conductor
companies are well established, e.g.
in Penang, Shah Alam and Kulim,
and have benefited from the
conducive and profitable business and
manufacturing environment in
Malaysia. PV companies with interest
towards front-end manufacturing
have the potential of strong earnings
from the existing skilled labour and
established manufacturing
environment for silicon, wafer and
cell production.
Similar to the clustering of semi-con
companies in Malaysia, a growing
number of PV companies is
establishing manufacturing in Eastern
Germany, e.g. Thuringen, Berlin and
Saxony. Today Eastern Germany has
attracted significant number of
companies for local manufacturing,
thanks to generous incentives from the
European Union and State
Government for production facility and
manpower. The cluster in Eastern
Germany has already been renamed as
Solar Valley; since 1996 the Solar
Valley has created more than 20,000
jobs in tooling business (related to PV)
and along the PV value chain. And in
2007 and 2008 alone, 15 new solar fabs
will be built, creating up to 10,000 new
jobs.
Another cluster location for
growing PV manufacturing is Oregon,
USA, with focus on silicon and cell
manufacturing because of low-cost
hydro power, very stable power supply
and highly skilled labour from existing
semi-conductor industry. Start-ups
with focus on 2nd and 3rd generation of
PV cells concentrate in the Silicon
Valley in California. The Silicon Valley
is attracting the highest venture
capital (VC) and private equity (PE)
investment and investors have
renamed the Silicon Valley to ‘PV
Valley’. A recent report by the United
Nations Environment Programme
(UNEP) concludes that in 2006, US$4.9
billion (RM17.6 billion) VC and PE
investment were poured into new clean
energy companies and renewable
energy (RE) projects in the USA. The
US is the largest single destination
Figure 2: Kulim High Tech Park, Malaysia.
globally for venture capital and private
equity investment and investment in
PV (21%) is the second largest after
Biofuels with 34%. Considering these
facts and estimating that around 60%
of the VC and PE money goes into
California and around 30% into the ‘PV
Valley’, more than US$180 million
(RM648 million) of VC and PE
investment went into new companies
and new technologies in the ‘PV Valley’
in 2006 alone.
PV is BIG business! Today many
Industrial Development Agencies
responsible for Foreign Direct
Investment (FDI) are participating in
exhibitions and are collaborating with
respective country chambers of
commerce to woo international PV
parties to the country. And exhibitions
with focus on industry and products are
mushrooming. Soon we will have a
section or day dedicated for investors
to inform about local PV
manufacturing in respective countries.
Until now, this is not addressed and
may become an important platform in
the future. The race is on – everyone
has recognized the huge potential of PV
and revenues, especially the
manufacturing of PV products and
exporting the final products to the
booming markets. Countries not known
on the PV map so far, but known for
abundant solar sources, such as
Singapore, United Arab Emirates (with
Sharjah, Fujairah) and Mexico (Baja
California) are wooing international
PV companies and attracting an
increasing number of them with
attractive packages, including up to 50
years tax holiday (UAE), equity
participation (Singapore) and low-cost
labour (Mexico). But for investors it is
becoming increasingly difficult to
differentiate between all the offers, all
of them appear to be an eye-catching
bouquet of flowers but start to wither
after few days. Adding to the difficulties
are ‘consultants’, who act as middle-
man trying to make their cut and use
the opportunity to ride the ‘PV business
wave’.
For the past two years and possibly
inclusive of next year, the industry has
Local and Global
Manufacturing
Opportunities in
Photovoltaics
been and is still talking about the
silicon bottleneck, which hindered the
rapid expansion of the PV industry. The
problem seems to be properly
addressed and more than 120,000
tonnes of annual silicon production
capacities will be on-line from 2008
onwards, able to supply a demand of
at least 10 GW annually. The industry
is positive that the issue has been
addressed and solutions are in place to
resolve this bottleneck, and forecasts
that the growth rate of PV will resume
the escalation rate as before. But
what’s next? Bottleneck on human
capital? Yes, this is most likely! But
some say, let’s harvest today – the
future is now and is definitely PV. But
we have to be cautious and should
reconsider our main objectives ‘to bring
the cost down’ and ‘serve the global
market, including also undeveloped
countries’.
The focus shifted in the last 5
years towards the high-profit
markets in Europe and the USA and
the off-grid market is given less
attention. Profit is high in grid-
connected markets with a feed-in-
tariff (FiT) programme and every
industry player like to profit as fast
as and as much as possible. What if
policies change and markets become
less attractive?
Hopefully there will be new FiT or
Renewable Portfolio Standard (RPS)
markets, but we have to keep our
objectives in focus and achieve PV
system cost of less than US$3/Wp
(RM10.8/Wp) from 2010 onwards, as
once promoted to our politicians. The
industry needs to cut back their high
profit and reduce system cost to
sustain a long-term development of
the PV market in order to achieve
grid-parity, and also to be able to
supply the off-grid market in rural
areas again.
The industry has to balance the
market development with the
socioeconomic impacts; which is
somewhat a delicate balance between
serving ‘the have-not’, e.g. undeveloped
countries and ‘the investors’ interest’,
e.g. FiT markets.
PV Industry Magazine August 07 17
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The PV Industry Value
Chain – An International
Snapshot
The PV industry may be
subdivided into the following groups
representing different steps in the
PV value chain: producers of
upstream materials, ie feedstock,
ingots, blocks/bricks and wafers;
producers of semi-finished and
finished PV products, ie PV cells
and modules; producers of balance-
of-system components for PV
systems, ie charge regulators,
inverters, batteries, mounting
structures and appliances.
The total value of business in
2006 amongst the International
By Greg Watt, Operating Energy Agency PV Power Systems
Agent for IEA PVPS Task 1 Programme1 countries was
approximately 10 billion USD,
along the length of the value chain
from feedstocks to PV system
deployment. In parallel with the
business value of PV production and
markets, the economic value in the
IEA PVPS countries can be
characterized by the total direct
employment of about 70,000 people
across research, manufacturing,
development and installation.
To make single crystal silicon
ingots, multicrystalline silicon ingots
or multicrystalline silicon ribbons,
the basic input material is highly
purified silicon. The process is the
same as for producing semiconductor
grade silicon. However, the producers
have simplified some steps in their
processes for supplies to the PV
The PV Industry
Value Chain – An
International
Snapshot
industry. There are many attempts to
replace the current expensive
purification process based on
chemical gaseous purification by
cheaper alternatives; however these
are not likely before 2008 at the
earliest. In 2006 there continued to
be four major producers of solar grade
silicon: Wacker in Germany, REC
Solar Grade Silicon and Hemlock
Semiconductor Corporation in the
USA, and Tokuyama in Japan.
Between them, they produced about
60% of the feedstock required by the
PV industry in 2006. The USA is a
large exporter at this level of the PV
industry value chain. It is reported
that the selling price of solar grade
silicon increased by about 20% from
2005 to 2006.
Ingots are of two types: single
crystal and multicrystal. Ingot
producers are in many cases also
producers of wafers. European and
Japanese companies feature most
prominently in this section of the
industry value chain. Some
companies are vertically integrated,
controlling the process from ingots
to cells and modules. The companies
having their own feedstock or
having secured long term contracts
are those best able to grow. An
interesting trend is the decrease of
wafer thickness, probably strongly
motivated by the rising price of
• See page 23
PV Industry Magazine August 07 21
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• From page 21
silicon feedstock, and an ongoing
focus on improving manufacturing
efficiency.
2006 provided some interesting
cell and module growth stories in
individual countries and also at the
global level. The total photovoltaic
cell production volume for 2006 in the
IEA PVPS countries was reported to
be about 1,900MW, up from
1,500MW in 2005, or an increase of
27%. In reality global growth is even
stronger since production is also
increasing rapidly outside the area
covered by the reporting countries.
Non-PVPS countries (particularly
China, Taiwan, India, and the
Philippines) now possibly account for
over a quarter of global cell
production and over 30% of global
module production. Japan was the
leading producer of cells (920MW)
and modules (645MW) during 2006.
Production of cells and modules in
this country accounted for 48% and
39% respectively of the IEA PVPS
countries’ production, with Germany
in second place with 27% and 21%
of production respectively. The
relative German market share in
2006 increased at the expense of the
Japanese market share. The
Japanese producer Sharp maintained
its lead, with the German producer
Q-Cells in second position, followed
by Kyocera, Sanyo Electric and
Mitsubishi Electric. These five
companies accounted for about 60%
of total cells produced in 2006. In the
United States, the third largest
producing country, production of cells
increased by 29% from 2005, while
module production remained flat.
However, US output of thin-film
technologies saw another dramatic
production increase of 94%, on the
back of a 109% increase the previous
year.
In 2006 module production in
Europe clearly surpassed that of
Japan for the first time. Crystalline
silicon technologies maintained their
dominance, accounting for 91% of the
market. However, this percentage has
slipped three percentage points from
the previous year. Interestingly, total
2006 module production only
increased by about 9% over 2005
production. The cell production
capacity in the IEA PVPS countries,
defined as the maximum output of a
manufacturing facility, increased by
29%, largely due to growth in
Europe. Utilization of capacity was at
69%. The increase in the module
production capacity and the
utilization of capacity were 15% and
The PV Industry
Value Chain – An
International
Snapshot
58 % respectively.
Some consistent themes emerged
during 2006: cell supply problems are
creating dire circumstances for many
smaller, disaggregated module
producers; foreign product and price
offers are able to strongly impact
domestic markets; access to a
booming foreign market can provide
not only a lifeline but a goldmine for
the industries in some countries
where the domestic market has
collapsed; and East Asia is the
emerging powerhouse for PV cell and
module production internationally.
Provided PV can retain the
political favour it currently enjoys in
a number of key markets for the next
decade or so, continuing very high
market growth rates of 30-40% per
annum seem assured. This presents
a very attractive proposition for
investors of all kinds, as the
increasing spate of public listings for
PV companies attests. The steady
march of the main manufacturing
centres towards countries with lower
production costs – notably East and
South East Asia, but also central
Europe - seems inevitable. This will
accelerate PV’s convergence with the
price of conventional electricity
supplies, provided quality control is
not compromised.
PV Industry Magazine August 07 23

Latest PV Business News
Following the latest news on PV business from around the globe collected from various sources
such as www.solarbuzz.com or www.photon-international.com or
www.renewableenergyaccess.com or www.renewableenergymagazine.com. Please browse the
recommended indicated links to be informed about the latest development in the PV market.
EUROPE:
Bonn, Germany: SolarWorld plans
manufacturing expansion to 1
Gigawatt
Against the backdrop of a booming export
business, the SolarWorld Group is to
build another integrated solar factory
(GigaFab) in Freiberg, thereby
increasing the capacity of wafer
production in Saxony by 500 MW to 1.0
Gigawatt. The doubling of the previous
expansion target is due to the high
international demand for the silicon
wafers of the SolarWorld AG subsidiary
Deutsche Solar AG, one of the world
leaders in the production of the super-
thin silicon wafers.
Pfäffikon, Switzerland: New thin film
process developed by Oerlikon Solar
Oerlikon Solar, a Swiss solar company,
has been able to develop a transparent
conductive oxide process, which will be
used in a new production plant. Oerlikon
Solar is so far the only company to offer
this technology, known as TCO process,
integrated in the thin film production
process. Oerlikon Solar will open a new
plant in Germany focusing on this new
technology, using low-cost,
environmentally friendly zinc oxide
instead of the commonly used fluoride
doped tin oxide. “This customer activity
further solidifies our leadership position
over our competitors in the marketplace,”
said Mr Uwe Kruger, CEO of Oerlikon.
Portugal: Solar sector waits for
Government signal
Portugal is the sunniest country of
Europe but remains amongst the last
ones in developing solar photovoltaic
electricity. If adequate steps to revise the
current framework to support the
development of photovoltaic electricity
are taken, the potential to develop this
clean source of energy is huge. The
Government has limited to 150 MW the
capacity to be installed by 2010. The
European Photovoltaic Industry
Association estimates that the total
installed capacity in 2010 could be
superior to 300 MW if the right decisions
are taken. Portugal has not yet measured
how developing a local market is
synonym to creation of jobs, local
industry and reduction of CO2 emissions
(potentially 300,000 tonnes in 2010)
contributing therefore to Kyoto targets.
Phönix SonnenStrom AG renamed to
Phoenix Solar
Phönix SonnenStrom AG, a leading
international photovoltaic systems
integrator is to be renamed as Phoenix
Solar AG. Upon changing the company
name to “Phoenix Solar”, the Group,
which is positioned in the international
arena, will bear the same name in all
countries. Phoenix Solar is established
in Singapore with a regional office and
services also the Malaysian market.
New process to speed up solar PV
module assembly
Société d’Energie Solaire (SES), a Swiss
company, has just patented a new system
that promises to offer numerous
advantages through material savings
and automation. In the new SES process,
the strings, instead of being soldered to
the peripheral end-ribbon, are folded over
the back of the cells, where they are
soldered with a simple machine onto a
flexible circuit. The circuit substrate is a
DuPont™ Tedlar® PVF film laminated
with DuPont Teijin Films™ Mylar® PET
polyester film; the circuit has special
contacts for attachment to the junction
box and also serves to insulate the strings
from the cells. After lamination, a special
junction box, made by Huber & Suhner,
is simply placed over the circuit and the
connections are soldered.
ASIA:
Thin film manufacturing plant planned
for Singapore
Singapore is set to launch its first solar
panel manufacturing plant using Thin-
Film Amorphous Silicon Technology in
the fourth quarter of this year – making
it the first country in this region to
operate one. The 10,000 m 2 plant,
utilising a fully automated
manufacturing process with a final
annual capacity of 60 MW, is expected to
employ 200 high-tech skilled operators
Latest PV
Business News
and engineers when fully operational.
SGX Sesdaq-listed Equation Corp
Limited (“Equation”) through its newly-
acquired subsidiary Solar Morph Pte.
Ltd. (“SolarMorph”), a Singapore-
registered company will undertake the
construction and operation of the plant
in Singapore, commencing with
establishing a 20 MW manufacturing
line by mid-2008 and continue to expand
to its full 60 MW annual capacity by
2010. Groundbreaking of the plant is
scheduled to take place in fourth quarter
of 2007. Production is scheduled to start
in July 2008 and will be ramped up to
full capacity by early 2009. SolarMorph
has already secured a three-year off-take
agreement worth US$120 million
(RM430 million).
Seoul, South Korea: Dongyang
Holding commissions SunTechnics to
construct 20 MWp PV system
Before the year is over, the largest
photovoltaic plant in Asia will be
constructed in SinAn, southwest of the
Korean capital Seoul. The leading
construction company in Korea,
Dongyang Engineering & Construction
Corporation of Seoul, commissioned the
German company SunTechnics, a
subsidiary of Conergy AG with the
planning and implementation of the ¤90
million (RM425 million) solar power
plant. The sun-tracking photovoltaic
system, with a total maximum output of
19.6 MWp, is the size of some 80 football
fields (600,000 m≤), and will produce
annually more than 27,000 MWh of
environmentally-friendly electricity from
the sun in the future. This will
correspond to the annual power
consumption of more than 6,000
households.
Japan: New solar cell performance
record by Mitsubishi
Mitsubishi Electric has achieved an
impressive performance of 18% for a
polycrystalline cell. The unit has an area
150 mm2 and has recorded a performance
1.2% higher than the previous record.
The new technology will be presented in
a solar fair at Fukuoka coming
December. Such a high performance has
been achieved thanks to a low-reflection
texturized area and a process that prints
the electrodes on the silicon, thus
reducing shadow areas.
The new technology will be used as
• See page 26
PV Industry Magazine August 07 25
Latest PV
Business News
• From page 25
from the end of 2007. Mitsubishi will then
achieve the highest performance level in
the industry, which will increase the
electricity production of its clients,
commented the Japanese firm.
First Solar expands manufacturing in
Malaysia
First Solar announced that its board of
directors has approved the construction
of an additional manufacturing plant in
Malaysia with an annual production
nameplate rating of 120 MW,
representing an investment of
approximately US$150 million (RM510
million). The additional production
capacity of the new plant is scheduled to
come on line in the first half of 2009.
Kazakhstan drafts Renewable Energy
legislation
Kazakhstan could become the next
country to pass legislation supporting the
development of renewable energy after
Government ministries declared support
for the development of draft legislation
regulating this new industry. Ambitions
for RE in Kazakhstan remain fairly
modest, the power sector modelling
carried by UNDP shows that 1,000 MW
of small scale hydro power and 2,000 MW
of wind power can be constructed by
2024. Nevertheless, the significance of
this is immense in a country whose
economy is so linked to the hydrocarbon
markets. As a consequence Kazakhstan
is the largest per capita emitter of
greenhouse gases in Central Asia.
PV industry in China confronts huge
potential risk
Production of solar cells in China has
shown an impressive growth over the last
few years. But the PV market overseas
remains unsatisfactory in contrast to the
vigorous expansion
of production
capacity. Currently,
German market –
that’s the world’s
largest consumer of
solar cells – and
other overseas
markets are
growing slowly. As
over 94% of the
China’s solar cell
products are
exported, this slow
rate of growth in foreign lands comes as
important reason why Chinese PV industry
is at risk. Unlike developed countries, no
specific subsidy policy is provided by China
for its PV industry. It is still far behind the
developed countries, for example Japan and
Germany, in both scientific research system
and infrastructure. Therefore, the Chinese
govt. should offer incentives and subsidies
for solar energy-based electricity generation
since this will encourage demand in
domestic PV market and also ensure the
26 PV Industry Magazine August 07
expansion of PV industry. China has
ambitious plans towards developing the
renewable energy sources, however, coal is
expected to remain the principal source of
energy in near-term.
AMERICA:
Tucson, USA: SOLON to start module
manufacturing towards End of 2007
SOLON AG, one of Europe’s largest
manufacturers of solar energy systems has
opened a new subsidiary in Tucson,
Arizona. SOLON will commence module
manufacturing operations in Tucson (US)
in late 2007. The company will produce high
efficiency solar modules, and provide solar
integrated design and installation services
to large-scale commercial, municipal and
utility customers throughout the United
States.
General Electric, USA: The quest to
develop low cost solar PV technology
GE Global Research Center recently was
awarded a three year, US$46.7 million
(RM160 million) program from the
Department of Energy to develop low-cost
solar PV technology. This new program was
granted through the “Solar America
Initiative”, which is a part of President
Bush’s Advanced Energy Initiative. The
goals of this project are to decrease the cost
of manufacturing and distributing solar
energy to ultimately
bring the cost of solar
energy to parity with
the grid. GE will be
looking at three
d i f f e r e n t
technologies for the
solar cell: high
efficiency silicon-
based cells, moulded
silicon wafers, and
flexible thin films.
Santa Clarita, USA: BioSolar builds bio-
based prototype solar cell
BioSolar™ Inc., developer of a
breakthrough technology to produce thin
film, flexible solar cells on bio-based plastic
substrates announced that the company
has achieved another milestone in its
previously announced development
program to create the world’s first bio-based
solar cell. BioSolar’s bio-based proprietary
films can withstand the environment of the
photovoltaic lamination oven, and working
solar cells can be made using BioSolar’s bio-
based film as part of the packaging for
crystalline silicon-based PV modules as
well. The three fully functional prototype
solar cell modules using BioSolar’s
proprietary bio-based backsheets
performed to the cell specifications.
Canada: Ontario inks over 50 MW of
PV projects in first four months
The Ontario Power Authority (OPA)
reports that it has approved 27 contracts
for over 50 MW of PV generating capacity
in the first four months of the year
through the Canadian province’s new
Renewable Energy Standard Offer
Contract Program. The program officially
went live late last year but did not
execute its first contracts until 2007. It
offers PV projects the highest price for
renewable energy fed into the Ontario
grid at a non-declining 42¢ CAD
(RM1.38) per kWh over 20 years. So far,
the program has attracted mostly large-
scale projects, including a 9.12 MW
project to be installed southwest of
Toronto by large US-based project
developer and installer SunEdison LLC
and Canadian joint-venture partner
SkyPower Corp. This is the first of
several joint projects being pursued by
the two companies that has been
approved by the OPA, which caps the size
of any given project at 10 MW. The
companies have said they intend to build
at least 50 MW by 2009.
USA: Nearly 90% of Americans think
solar should be new home option
According to a recent Roper survey
commissioned by Sharp Electronics
Corporation, nearly 90 percent of
Americans think that solar electricity
should be an option for all new home
construction, up significantly from one
year ago (79 percent). Three-quarters of
survey respondents perceive solar power
to be more important than ever, the
report says. The survey was conducted
in May 2007 among 1,004 adults to
measure their perceptions of solar power.
“More and more, consumers are
interested in solar energy, as the results
of this survey clearly show. The message
from consumers to homebuilders is
clear—builders can differentiate
themselves while satisfying customer
needs by offering solar electricity on any
home they build,” said Ron Kenedi, vice
president, Solar Energy Solutions Group,
Sharp Electronics Corporation.
USA: Lockheed Martin solar arrays to
be launched to space station
The third of four pairs of massive solar
arrays and a second Solar Alpha Rotary
Joint (SARJ), built by Lockheed Martin
at its Space Systems facility in
Sunnyvale, Calif., was launched aboard
the space shuttle Atlantis to the
International Space Station (ISS) in
June, 2007. The Space Systems ISS solar
arrays are the largest deployable space
structure ever built and are by far, the
most powerful electricity-producing
arrays ever put into orbit. The eight array
wings were designed and built under a
US$450 million (RM1,550 million)
contract from the Boeing-Rocketdyne
Division in Canoga Park, Calif., for
delivery to the Boeing Company and
NASA. When fully deployed in space, the
active area of the eight wings, each 107
by 38-feet, will encompass an area of
32,528 square feet, and will provide
power to the ISS for 15 years.
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Always a sunbeam ahead
Market Movers
of Solar
Photovoltaics
in Malaysia

Market Movers of Solar

Photovoltaics in Malaysia
call was coy; at only
Graph on Result of 1st Bid for SURIA 1000 40kWp, it served to flirt
with the market. At the
closing of the first call,
the market reacted with
a positive signal; there
By Wei-nee Chen were 39 applicants with
When Nik Fadzrina Hussain received a total of 155kWp,
a call from her PV service provider, she almost four times the
couldn’t believe she is one of the target PV capacity.
successful bidders for the first call for The first call for
SURIA 1000 programme. Nik Fadzrina SURIA 1000 puts a cap
and her husband have been planning of 75% on the maximum
to build a new home in the State of rebate offered by the
Pahang and the key feature of their programme. The
dream home is being environmentally average rebate for the
friendly. Today, the lucky couple is first batch of recipients
among one of the 14 recipients for the is 53% and this
first call for SURIA 1000 programme. highlighted the
willingness of the public
What is SURIA 1000? to pay in order to secure
SURIA 1000 is a national programme their bid. The bidders’
initiated under the 9th Malaysia Plan contribution was
to encourage solar building integrated forecasted at a total of
PV market to grow. The programme is RM300,000; the actual
similar to the Japanese Sunshine amount contributed by
Programme and the German’s Rooftop the bidders amounted to
Programme. It offers attractive capital RM800,000.
incentive to those interested in As a result of the
installing solar BIPV and the lower financial
programme is for both residential and contribution requested
commercial properties. by the successful
However, unlike the Japanese and bidders, the total PV
German’s programmes, the SURIA capacity being awarded
1000 is based on bidding process in is increased from 40kWp
which the bidders compete among each to 58kWp.
other for the financial incentive. The Does investment in
selection of recipients is based on least solar PV makes any
amount of financial contribution sense? Apparently so;
requested by the bidders from the 65% of the successful
SURIA 1000 programme. introduced to the public on 26 th recipients operate their own business
November 2006 by the Minister of and the idea of being able to hedge
The First Call for SURIA 1000 Energy, Dato’ Sri Dr Lim Keng Yaik. against imminent future electricity
The first call for SURIA 1000 was The PV capacity reserved for the first tariff hike makes more sense out of the
dollar invested.
For detailed analysis of the first call
Bidding Schedule for SURIA 1000 for SURIA 1000, please visit http://
www.ptm.org.my/bipv/S1.html
Call for Bidding Maximum Capacity Available Maximum Bidding
for bidding (kWp) Discount (%)
The Second Call for SURIA 1000
SURIA 1000 programme was officially
1st Dec 2006 – 1st Apr 2007 40 (residential only) 75 launched on 22nd June 2007. The event
was officiated by the Minister in the
1st Jun 2007 – 1st Oct 2007 60 (residential only) 70
Prime Minister’s Department, Dato Sri
3rd Dec 2007 – 1st Apr 2008 80 60 Mohd Effendi Norwawi on behalf of the
2nd Jun 2008 – 1st Oct 2008 120 55 Prime Minister of Malaysia.
1st Dec 2008 – 1st Apr 2009 140 50 In the Prime Minister’s speech,
which was delivered by Dato Sri
1st Jun 2009 – 1st Oct 2009 160 45 Effendi, the Prime Minister pledged the
1st Dec 2009 – 1st Apr 2010 180 40 Government’s support and
• See page 29

28 PV Industry Magazine August 07


• From page 28
commitment towards solar BIPV as one
of the renewable energy strategy
outlined for energy security and
climate change mitigation efforts by
Malaysia.
The Prime Minister, Dato’ Seri
Abdullah Ahmad Badawi shared
passionately with his people, his vision
he coined “Wawasan SURIA” in which
he aimed to replicate what he saw in
his recent trip to Osaka, Japan.
According to Dato’ Seri Abdullah, he
saw solar PV systems aesthetically
integrated with both residential and
commercial buildings and generating
clean electricity at the same time. A
sight which was rapidly transformed to
a vision for a nation blessed with
abundant and consistent sunlight.
The second call for SURIA 1000 is
only for residential with a target PV
capacity of 60kWp and maximum
rebate of 70% to the bidders. All
applications for SURIA 1000 must go
through the listed PV Service Providers
( h t t p : / / w w w. p t m . o r g . m y / b i p v /
APVPS.html) which act as a 1-stop
BIPV centre for the bidders.
Commercial bidders would be able to
bid from the third call for SURIA 1000
which will be from 3rd December 2007
to 1st April 2008.
SURIA for Developers
Recognizing the influential role of
property developers in changing the
lifestyle of the people, the Prime
Minister Dato’ Seri Abdullah
announced a special financial incentive
programme only for the property
developers.
The “SURIA for Developers” is a
special one-time programme which is
part of the SURIA 1000. The objective
of the programme is to promote the
development of sustainable solar BIPV
housing in Malaysia.
SURIA for Developers will provide
financial incentive of 3 million
Ringgit Malaysia for a target PV
capacity of 340kWp. With the
installation of solar BIPV in their
project development, the property
developers can finally declare their
homes as ‘truly sustainable’ with
electricity generated from a source
which is guaranteed to be free and
contributing to the betterment of the
environment.
The call for developers will be from
16th July 2007 until 1st January 2008.
Property developers can expect free
technical consultancy and market-
ing support from the MBIPV team.
Property Developers: How do I
participate?
• Eligible for new, on-going, or existing
property development projects
• Can either be landed or non-landed
properties.
• Maximum of two (2) property
developers will be selected, subject to
targeted BIPV capacity.
• Interested housing developers (or
architects/contractors) can submit
the application (form, guidelines,
T&C will be available from 16th July
2007) that includes:
• Profile of the developer.
• Development concept, including
masterplan indicating the allocated
parcel for SURIA development,
approved planning permission,
converted land title.
• Architectural drawings and concept
of solar BIPV (compulsory), and
passive or active energy and water
efficiency features (optional).
• Indicative cost of solar BIPV system.
• Solar BIPV capacity for each unit of
house must be minimum 4kWp and
maximum of 10kWp, subject to a
minimum total of 100kWp per
development.
• For landed property, each house in
the allocated parcel shall incorporate
solar BIPV feature.
• For non-landed property, solar BIPV
feature shall be incorporated as the
prominent feature covering a total
area of 750m 2 (crystalline solar
BIPV) or 1500m 2 (thin-film solar
BIPV).
• Letter of commitment to invest and
construct the SURIA homes, with a
target to complete and provide
vacant possession by year 2011.
The total grid-connected BIPV
systems in Malaysia stand at 578kWp.
The objective of SURIA 1000 is to see
at least 1200kWp of grid-connected
Market Movers
of Solar
Photovoltaics
in Malaysia
BIPV systems installed by the year
2010. Although the market for solar
BIPV is largely in embryonic stage, the
MBIPV Project focuses on developing
soft infrastructure to sustain BIPV
growth in the country. SURIA 1000 is
the forerunner of bigger things to come.
But first it must succeed.
If at first you do not succeed,
you try again..
Tunku Ahmad Burhanudin is among
the 25 bidders who did not succeed in
securing the bid for the first call for
SURIA 1000. According to Tunku
Ahmad, “I understand why I did not
succeed; I need to be more competitive
with my bidding. My request for
financial contribution from the
Government is too high”. In fact,
Tunku Ahmad has pledged that he
will not give up bidding for each call
until he finally succeeds in securing
his share for electricity generated
from the sun.
For more information on SURIA
1000, please visit http://
www.ptm.org.my/bipv/suria.htm or
email to suria1000@ptm.org.my
SURIA 1000 programme is
administered by the Malaysia Building
Integrated Photovoltaic (MBIPV)
Project. The Project is implemented by
Pusat Tenaga Malaysia for the Ministry
of Energy, Malaysia with further
financial support from Global
Environment Facility disbursed via
United Nations Development
Programme. The MBIPV Project
objective is to reduce the long-term cost
of BIPV technology by creating a
sustainable and widespread BIPV
market.
PV Industry Magazine August 07 29
Suria 1000
and SfD

Sustainable Development

19th September 2007

Kuala Lumpur Convention Centre (KLCC)
Malaysia
www.roofandfacade.com/forum.html

Hosted by: TECHNOLOGY COMMUNICATIONS PTE LTD

Supporting Media :

In conjunction with MALBEX 2007

& INTERNATIONAL CONSTRUCTION CONFERENCE 2007
 Overview
of Japan’s
PV Industry

Overview of Japan’s PV
Industry
By Izumi Kaizuka,
Manager
RTS Corporation
Production volume of PV cell/
module in Japan
2006 production volume of solar cells and
PV modules in Japan increased for 10
consecutive years, and recorded 927.5
MW, which is an 11% increase from the
previous year. While Japan has been the
largest PV production country in the
world since 1999, and the share of Japan
in the worldwide PV production has been
decreasing in recent years due to
globalization of solar cell/module
production and increase of production
volume in all over the world.
Production Volume (MW)
PV manufacturers in Japan
Currently, 10 companies are manu-
facturing PV cell/ module manufacturers
in Japan; Sharp, Kyocera, Sanyo Electric,
Mitsubishi Electric, Kaneka, Mitsubishi
Heavy Industries (MHI), Hitachi, Fuji
Electric Systems, Honda Motor and
FujiPream/ CleanVenture 21 (CV21).
Among them, latecomers manufacture
differential PV products. Hitachi started
manufacturing bifacial silicon solar cell
from 2003.
FujiPream and Clean Venture 21
jointly produce spherical Si PV module.
Fuji Electric Systems completed a 15-
MW/year plant in Kumamoto Prefecture
and manufactures flexible amorphous Si
module.
Honda established “Honda Soltec”, a
subsidiary for manufacturing, in
Kumamoto Prefecture to produce CIGS
PV module. Showa Shell Sekiyu also
completed a 20-MW/year
plant for CIGS solar cell in
Miyazaki Prefecture
aiming at starting
operation in 2007.
by manufacturers of raw material and
component for PV,
4) Formulation of the sales channel of
residential PV system.
These movements will contribute to
the establishment of the supply
framework. In the domestic PV system
market, product development of PV
system for public, industrial and
commercial use as well as residential use
will be advanced. Moreover,
demonstrative research of MW-scale PV
system will be advanced, aiming at power
supply. Users of PV system including
individuals, private companies and local
governments will understand the
significance of achieving the targets of
Kyoto Protocol and are becoming more
willing to introduce the PV system.
It is expected that the PV industry in
Japan will establish collaborative and
cooperative framework with other
ministries (besides METI) and agencies,
local governments, related industries as
well as users; in conjunction with
national energy strategies and enhance
the efforts to achieve full-scale

dissemination of PV system.
Towards self- Examples of PV systems in Japan
▲
sustainable PV
market
Expansion of PV system
introduction in Japan
aiming at self-sustainable
PV market will be
advanced by the measures
Trends of production volume of PV cell/module by manufacturer. taken by the government
Source: PV News, March 2007, partly modified by RTS Corporation
and the efforts of the PV
industry. Framework of
dissemination measures are promoted by
the Ministry of Economy, Trade and
Industry (METI) and the Ministry of the
Environment (MoE). Following METI
that has been leading Japan’s PV policy,
the MoE launched several measures to
introduce PV system to achieve Kyoto
Protocol.
In the supply framework of PV cell/
Hitachi Bifacial solar cell module, the PV industrial structure will
be enhanced and expanded over the
whole value chain in several aspects as
well as increase of production capacity
by PV manufacturers. The mechanism
to achieve this are:
1) New entry of thin-film PV
manufacturers previously described,
2) New entry of raw material
manufacturers into production of
Flexible PV module from Fuji Electric silicon feedstock for PV,
Systems 3) Enhancement of production capacity

PV Industry Magazine August 07 31

2006 Developments and Prospects on the Global PV Industry
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An industry report by Pegasus Business and Market
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Contents of the report:
World economy and energy overview including
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Global PV Industry
Development since 15 years
By Daniel Ruoss,
International Consultant
MBIPV
1992: Bill Clinton is elected as 42nd
president of the USA - Former
Czechoslovakia voted to split the
country into the Czech Republic and
Slovakia - Pope John Paul II issued an
apology, and lifted the edict of the
Inquisition against Galileo Galilei -
And the Photovoltaic industry was
cracking 100 MWp cumulative
installed power capacity. In 1992, the
annual revenue from doing business in
the PV sector was between US$0.2-0.3
billion (RM0.7-1.0 billion – applying
today’s exchange rate RM3.6 for US$1).
The United States of America was
dominating the global market in terms
of cumulative installed PV capacity
(~45 MWp) and product
manufacturing, e.g. Siemens (formerly
ARCO Solar), Mobil Solar and AMOCO/
ENRON Solar (with Solarex as
business unit). In 1992, the PV module
price dropped for the first time to below
US$5/Wp (RM18/Wp) and system
prices were around US$12-15/Wp
(RM43-54/Wp).
Products installed in the first
markets (USA, Switzerland, Japan and
Germany) are performing as
manufacturers had forecasted,
guaranteed and in turn, provided
Learning curve for production cost of PV modules (Source: United Nations University Press, modified by Daniel Ruoss)
important feedback that crystalline PV
technology is well understood and
mature. The photos (figure 1 and 2)
were taken in 2004 and both PV
components are still operational today.
These first market implementations
were critical as their successes lead to
increased confidence for the policy
stakeholders to design and implement
sustainable PV programmes to
widespread PV technology.
2007: The PV market has finally taken
off and is booming. Driven by
committed and long term policy
programmes implemented in Germany,
Spain, USA, Italy, France and Korea
the annual revenues End of 2007 will
exceed US$14 billion (RM50 billion),
resulting in a growth factor of 50 to 60-
fold compared to 1992. The biggest
annual market – for the fourth time in
a row – will be Germany with an
annual installed PV capacity exceeding
1.6 GW (End of 2007). The United
States of America secured their once
top spot in the PV ranking (annual
installed capacity) and become the No.2
market worldwide overtaking the
Japanese (End of 2007). In Japan the
policy changed few years ago and
Government subsidy programme for
residential PV application had
concluded. This resulted in PV
becoming less attractive due to the still
higher cost of generating electricity for
PV compared to conventional
electricity. But in Japan this price gap
Global PV
Industry
Development
Since 15 Years
is closing rapidly and PV is already
competitive in peak power pricing. In
a few years grid-parity will be achieved
in urban centres of Japan and also in
some parts of the USA. Grid parity is
when cost for electricity generated by
PV system matches the conventional
electricity cost can be achieved when
cost for PV system decline and
conventional electricity prices are
reflecting true cost.
Compared to 1992 the global
market experienced module cost
reduction of 30% (1992: US$5/Wp /
2007: US$3.4/W and 1992: RM18/Wp /
2007: RM12.2/Wp) and an increase of
efficiency of 150% (1992: 12% / 2007:
18%) for mono-crystalline PV cells. The
industry is developing fast to achieve
module prices of less than US$1/Wp
(RM3.6/Wp). From time to time the
industry experienced some hiccups but
they have reacted fast towards
increasing production capacities and
cost reduction. In 1988-1990 and then
again 2005-2007, supply shortages of
crystalline silicon wafer scraps led to
briefly higher prices of PV modules.
After 2008-2009, it is predicted that
prices will decrease, owing to additional
solar-grade silicon capacity coming on-
line and new technologies to use metal-
grade silicon feedstock for acceptable
cell efficiencies. But prices for modules
will not resume back to normal price
reduction trend, because today’s
policies implemented support higher
sales prices for modules and benefiting
high profit and growth along
the value chain.
But what can be said
about long-term forecasts?
When will production cost for
PV module be below the
US$1/Wp mark? Today the
race is on to be the first
company to promote products
which will achieve grid
parity. The estimated PV
system cost should be around
US$3/Wp (RM10.8/Wp) –
with module prices close to
US$1/Wp – to achieve grid
parity in markets such as
Japan, USA, and partly
Europe. There is enormous
potential for further PV cost
reduction through
technological innovation and
economies of scale. This
• See page 34
PV Industry Magazine August 07 33
Global PV
Industry
Development
Since 15 Years
• From page 33
situation is depicted in the ‘PV learning
curve’ shown in figure 3, which
presents the module production cost
estimated in 1994. For crystalline
technology the PV learning curve is
well on track and according to
predictions. Thin film technologies are
expected to achieve faster cost
reduction but due to a demand
outstripping the supply in the past, the
prices are kept high and modules are
sold only slightly below (around
US$0.4-0.8/Wp, RM1.5-2.9/Wp) the
prices for crystalline modules.
Thin film is expected to be the first
to achieve production cost at US$1/Wp
– as per figure 3 when market reaches
10 GW; some companies claim to
achieve the benchmark already. But the
crystalline technologies still have room
for improvements and will continue to
dominate the market in the next five
to ten years. Today c-Si technology has
a market share of 94% and achieves cell
efficiency of 18% to 20%, and this is two
to three times the efficiency of thin-
film. Improvements can be made on
increasing manufacturing speed or
higher efficiency or increasing the
production yield, e.g. towards Gigawatt
production facility. In 1992, the No.1
PV module manufacturer (Siemens,
USA) had an annual production output
of ~10 MW/year. 15 years later, the No.
1 PV module manufacturer (Sharp,
Japan) has an annual output of close
to 600 MW/year; 60 times higher than
15 years ago, which means the
production output doubles
approximately every 2.5 years.
Following this manufacturing
upscaling process, we can expect to see
the first 1,000 MW (1 Gigawatt)
production facilities from 2010
onwards. This is certainly one of the
approaches to bring the cost down – via
economics of scale – another is to have
innovative manufacturing techniques,
e.g high-efficiency back-contact cell by
Sunpower (figure 4) or PV modules
where the strings of the cells are
interconnected by folding over the back
of the cells and soldered with a simple
machine onto a flexible circuit. The
circuit substrate has special contacts
for attachment to the junction box and
also serves to insulate the strings from
the cells.
An identical impressive growth was
experienced for other PV products and
manufacturing equipment. In 1992; the
annual market was only 20 MWp per
year and equipment manufacturer did
not consider the market at all. In 2007;
any major company from the tooling
business promotes his product range
and the possibility to modify easily to
PV manufacturing and is competing
34 PV Industry Magazine August 07
aggressively to get a market
share. Even a 1% market share
will result in revenue of
approximately US$140 million
(RM500 million) in 2007. Many
companies worldwide have
recognized the huge and fast Latest successful IPO by Sunergy
growing business in
Photovoltaics and have considered
diversifying their businesses to PV. In
the balance of systems (BOS), the
development of inverters is worth
commenting. In 1992; the drive was
towards string inverters and first
design of transformerless inverters
were presented at international
conferences. The reaction was strong;
transformerless inverters were labelled
as a ‘danger for human safety’ and
‘deadly piece of electronic chunk’. In
2007 the market share (in MW) of
transformerless inverters is at least
30% and increasing. The advantages of
transformerless inverters have been
fully recognized and the products are
complying with international safety
standards and not posing any harm to
the installer and end-user.
Development on inverters has reached
a peak and a new product is introduced
to the market almost every four weeks.
Existing inverter manufacturers are
aggressively defending their market
share or increasing their market share.
New multinational enterprises are
entering this business to secure part
of the PV cake or at least the icing.
Competition is fierce but end-users are
all smiles as they get the cost reduction nanostructure substance. All these
passed on. Inverter cost reduced
around 60% from 1992 to 2007 (1992:
US$2/W AC = RM7.2/W AC and 2007:
US$0.7/WAC = RM2.5/WAC) and further
cost reductions are expected.
Photovoltaic in 2007 has certainly
caught the eye of the industry and also
the finance sector. The market in 2005
to 2007 is in upheaval and does not
follow the PV value chain as it used to
do. Today investors deal with engineers
and go from silicon
manufacturing to module
manufacturers to get a
fast profit. Long-term
planning becomes difficult
and quality is often of
lesser priority. In the last
15 years, we saw more
than 50 IPOs from PV Organic solar cell by
companies only, Plextronics
generating a market
capitalization of > US$50 billion (>
RM180 billion) and venture capital
(VC) investment in start-ups and
innovative approaches exceeded
US$280 million (RM1 billion) in the
last 4 years. Companies in the USA
attracted the largest share of risk
capital, and Chinese companies lead
the business by number of IPOs and
market capitalization. In fact one could
almost conclude in order to have a
successful IPO, the company must be
vertically integrated or front end
manufacturing and from China.
As highlighted first generation PV
cell, crystalline technology, will
dominate the market for the next ten
years, but the second generation, thin
film technology, is upscaling their
production output fast to reduce
production cost of solar modules. But
as depicted in figure 3, thin film
production cost was expected to achieve
the US$1/Wp (RM3.6/Wp) level with a
market of around 7 GWp cumulative
PV capacity installed but so far has not
achieved the target. Even with several
hundreds of Megawatt new production
announced and thin film technologies
being the darling of investors and new
start-up companies, we have to
consider the time and the difficulties,
especially with large area glass
substrates, to upscale the production
process into full operation (e.g. up to
100 MW). And the focus is already
shifting towards third generation solar
cells, such as of organic or
activities will finally drive the cost
down and contribute to the widespread
use of PV in today’s life.
15 years into the future; i.e. 2007
to 2022, PV has reached grid-parity
in most of Europe, Japan and the
United States of America and is a
mainstream product for power
production and as building element.
Major power utilities have invested
over the last 10 years (2010 onwards)
into power production by
PV to meet their
exponential growing
energy demand. The
power structure is finally
shifting from the more
than 100 year old
centralized grid structure
towards decentralized and
the market is
internationally liberalized
to allow IPPs to negotiate their feed-in
tariff independently. Market growth is
finally not depending on policy
programmes anymore but only on the
industry to sustain and growth factor
is substantial resulting again to
almost 60-fold, as it did the last 15
years from 1992 to 2007.