NanoMarkets continues to believe that there are opportunities for commercialization of smart coatings in the photovoltaics (PV) sector, even though the PV market is quite different today than it was just a year ago, both from an economic and a political perspective.
Starting in 2012, the PV market is entering a period of reduced growth. This new market is very different from the one of the last several years, in which year-to-year growth in production doubled (or more), even in the midst of a worldwide recession. Today, however, a glut of conventional crystalline silicon (c-Si) PV modules on the market after over-production by the Chinese PV panel makers, along with dropping prices, is expected to significantly slow growth rates in PV production starting in 2012 and for the next few years.
Meanwhile, the political environment has also changed. Lingering fiscal concerns in the United States and the European Union, coupled with slow growth and high unemployment, have led governments around the world to pursue serious cost-cutting measures in an effort to reduce debt. To date, most subsidies, feed-in tariffs, and other tax incentives for PV remain in place. However, their future is uncertain; governments are likely to see these subsidies as targets for the cost-cutting axe. (At the time of this writing, Germany has just announced a more aggressive FIT reduction of 30% vs the previously targeted 15%)
But what does all of this mean for smart coatings in PV applications? First of all, it means that suppliers of materials and technologies to the PV market cannot simply rely on high growth rates for organic growth of their products. It also means that the ongoing commoditization of PV, especially in the market-dominant c-Si PV sector, will encourage PV panel makers to do one of two things:
• Look for ways to cut prices in order to stay competitive and keep sales volumes up, or
• Look for ways to add value to their products and create differentiation in the market in order to maximize profit margins.
That portion of the PV sector that opts for the latter strategy—addition of value-added features to their PV products—is where the opportunities can be found for smart coatings suppliers. To capitalize on these opportunities, coating suppliers must actively make the case to their customers, and potential customers, that the additional cost of adding a smart coating to a PV panel or module is worthwhile to the bottom line.
In summary, NanoMarkets believes that there are significant opportunities for smart coatings suppliers in the PV business. The sheer size of the PV market as a whole means that the addressable market for smart coatings in PV is potentially large; even modest penetration in the PV market for smart coatings can lead to significant revenues for coatings and coatings technology suppliers. In addition, the adoption of smart coatings in PV can help PV panel makers accomplish two key goals important to the future success of the PV sector:
• Integration of smart coatings can cost-effectively increase conversion efficiencies for PV, and/or,
• Smart coatings can provide additional functionality that enables PV panel makers to create "premium" products and differentiate themselves in a rapidly commoditizing, and homogenizing, marketplace.