In the beginning of 2018, many manufacturers like GS Solar, CIE Power, Hanergy, Tongwei, AKCOME, and SunLink PV have continually announced HJT expansion plans. It seemed that N-type was on the rise. However, after China announced the 531 Policy, P-type product prices plummeted. Also, P-type made breakthrough in cost reduction and efficiency increase. On the contrary, due to immature capacity and technology, the N-type cell market continued to witness high costs and sale prices. Efficiency performance didn’t turn out as expected either. With all these reasons, many manufacturers have postponed the HJT expansion plans. We will discuss several aspects in this article to see how N-type market will develop.
First, in the aspect of capacity, the world’s N-type capacity reached 9.4GW in 2018, of which, it’s the least difficult to put PERT into mass production with the existing capacity reaching 2.1GW. TOPCon has 2GW of capacity. Capacities of HJT and IBC reached 3.8GW and 1.5GW, respectively, owing to the early development. Yet, due to high technology skills, high equipment and material costs, and lack of end-user market, only a few manufacturers can go into mass production. It’s projected that more and more manufacturers will implement TOPCon next year, turning TOPCon into one of the major development technology for N-type. As demand rebounds next year, HJT expansion plans will gradually be resumed too.
Next is the roadmap of technology. At the moment, technologies are relatively mature for the TOPCon and HJT. However, which one will become the mainstream N-type technology remains to be seen.
For TOPCon, LG is the major overseas company with the best TOPCon development. The company uses TOPCon with M4 wafers/MBB technology to widen the wattage gap with PERC and HJT modules. Jolywood is the first one to mass produce TOPCon in China. For HJT, Panasonic is the first foreign firm for HJT development. But the production lines are older and they still use 5-inch cells. Panasonic not just doesn’t have any advantages in module wattage but also the special wafer size has pushed up the cost. Many Chinese manufacturers like Sunpreme, Jinergy, CIE Power, and GS Solar have started to put HJT into mass production. Many new entrants were going to do the same. Yet, many have put on hold the expansion plans as P-type price plummeted after China announced the 531 Policy.
There are pros and cons for TOPCon and HJT. The biggest advantage for TOPCon is that some equipment may be compatible with the newer PERC production lines. Therefore, aside from those that already picked PERT as the mainstream technology like LG, Jolywood, and Linyang, some top-tier vertically-integrated companies will go with TOPCon too. But TOPCon will face more difficulty to improve efficiency further. Although HJT has advantage in cell conversion efficiency, the equipment is completely incompatible with current mainstream technology. It’s less likely for HJT to go localization at the moment. HJT has complicated production processes and thus investment cost and yield rate will be the major bottlenecks. New entrants are more likely to choose HJT.
Overall, the dilemma confronted by the N-type technologies including PERT, TOPCon, HJT, IBC, and HBC are either high production cost/limited price drop range, high-priced equipment and material, and a market share squeezed by the mono PERC market. The below is a detailed explanation:
1. High cost and limited price drop range
First of all, compared to a total PERC capacity of over 63GW, N-type capacity is relatively fewer. The N-type technology needs further improvement in terms of yield rate and efficiency. In addition, only the niche market will choose N-type products, many more will go for mono PERC with better cost effectiveness. With small capacity, low yield rate and lack of market share, the N-type market continued to witness high production cost with limited price drop range. Also, due to the rapid decline in mono PERC prices, the overall high-efficiency market sees low price trend. TOPCon/HJT prices can only be slightly higher or stay flat from cost. As a result, it’s difficult to gain profits with TOPCon and HJT.
2. Low level localization of equipment and material
The level of localization for N-type equipment and material is far lower than PERC. Although some N-type equipment has started to enter localization, the performance is not as stable as foreign equipment makers’. N-type is still reliant on expensive overseas silver paste or other auxiliary materials. It’s one of important reasons why cost can’t be lowered further for the N-type technology.
3. Mono PERC squeeze N-type market share
PERC cost and price rapidly declined after China announced the 531 Policy. Manufacturers not just put PERC with SE together to increase efficiency, but also put PERC with larger-size wafers and other auxiliary materials like LRF, LCR and white EVA to boost efficiency, widening the C/P ratio gap between P and N-type products. As mentioned above, many manufacturers have upgraded and expanded PERC production lines in 2018. Yet, they don’t have enough capital and investment for the N-type technology in such a short period of time, leading to lower N-type market share.
To conclude all of the above, the N-type technology still can’t compete with PERC in terms of capacity, maturity of technology/equipment, C/P ratio of efficiency/price. In addition, PERC capacity will expand 25-30GW every year in the next two years. However, PV InfoLink believes that there’s a difficulty for efficiency to go up further when SE-PERC pushes up the efficiency to over 22% in 2019. Efficiency improvement is becoming more limited for P-type multi/mono cells. Aside from collaborating with module technologies, the PV market must pay attention to the next generation technology. Therefore, N-type capacity will still slowly increase every year. Meyer Burger announced that the company has received 600MW HJT and Smart Wire (SWCT) order from a foreign company recently, the production will begin in 2H19 and will running at full capacity by 1Q20. On the other hand, expansion plans that were put on hold will be resumed as demand rebounds next year. The N-type technology and market are expecting to grow more rapidly after 2020.
However, before this, the primary strategy for N-type is to reduce cost. N-type technology maturity and efficiency can only be enhanced through the increasing capacity and the localization of equipment, silver paste, and other materials. There won’t be a breakthrough in the N-type technology until costs are reduced effectively.
In addition, the “Top Runner Program” also plays a key role in the development of N-type technology. Only about 500MW projects were completed with N-type products for the “General & Super Top Runner Program”, respectively this time. Yet, the new round of the “Top Runner Program” may request higher efficiency and technology compared to the previous three years, which will make it more difficult to complete the projects using P-type products. Perhaps it can encourage more manufacturers to win the bid with N-type products, boosting the development progress of the N-type technology.
Lastly, there is still no final conclusion of the mainstream development yet. PV InfoLink believes that because it’s difficult to gain profit for N-PERT and the difficulty and cost are too high for IBC, HJT and TOPCon will be the two major N-type technologies in the next two years. However, the actual trend will depend on the equipment maturity and cost reduction level next year.
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