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27 September 2019

“Bifacial up 10X in 5 years,” Wood Mac, but just 17% of market

We have assumed that the world is already going bifacial as fast as it can, not only because it makes sense – outputs can be as much as 25% higher – at a cost which is barely a blip in the capex scheme of things – but that Donald Trump’s agreement to leave bifacial off the list of components that incur tariffs, made it all the more obvious a choice.

But Wood MacKenzie this week, Xiaojing Sun, their Senior Research Analyst on Solar came out and said that bifacial would double this year and grow tenfold by 2024. It may be a very important statement to the market that gives everyone certainty that it is okay to switch to bifacial, but to us is was always a no-brainer, a decision you don’t need to be Sherlock Holmes to work out, for those that know the expression NSS or No SXXX Sherlock.

Wood Mac tells us that bifacial solar modules grew from 97 MW in 2016 to 2.6 GW last year and will hit 5.4 GW in 2019 and cumulatively to 8.2 GW. This will grow by ten times by 2024, so around 82 GW with an annual output of 21 GW.

Given that Irena capacity statistics for 2018 shows that only 94.7 GW of solar were installed in 2018, that’s over 20% (Wood Mac says 17.2%) of all solar going down this route, although presumably Wood Mac realizes that solar will be larger by then, despite how it sees the world of solar flatlining for the next few years, due to falling tax concessions in the US and China. Some areas such as floating solar or rooftop solar will not go down this route, because despite being offered bifacial panels for the same price, they simply do not increase the electricity payload.

In fact, we find it hard to imagine that anything short of 50% of solar will go down this route by 2024, making the Wood Mac forecast about 100% out. This is pretty much how far below reality most Wood Mac forecasts are, so about right. The simple truth is that Wood Mac will have asked all its major customers about buying intentions and looked at pipelines for this data. We suspect that a lot more attraction will be found for bifacial closer to installation dates, and far more will end up installed, because the cost differential will come down and down.

Wood Mac points out that the affordability of bifacial modules is becoming more appealing and says that production cost differential between bifacial mono PERC and monofacial mono PERC module is now as low as half a cent.

This is because it is relatively easy to retool existing monofacial module production facilities to make bifacial modules.

Sun adds that many advanced commercial solar cells are inherently bifacial, which means that the electricity generation from the back side comes with little additional cost at the cell manufacturing level. This is quite simply the way new developments come into being across the technology spectrum. 4G phones were expensive at first, but once the R&D costs were repaid, they went to the same price of below 3G phone prices. They then stopped making most 3G phone. This process tends to take about 2 years in a consumer driven market, and one where financial Institutions are backing clear investment decisions, should be even faster but we know that’s not always the case regarding bankability. Sun raises that issue and there will be some waiting for more data, but never underestimate a banker’s desire to share in the upside of projects that throw off spare energy which means more cash.

We would also argue that there are other technologies trends coming down the track. Perovskite is on the launch pad and will take 2 to 3 years to hit volume. There are other improvements such as carbon nanotubes converting heat on the panels into light and increasing the energy harvest way above the 32% threshold of today, which is perhaps 5 to 6 years away. But both of these are likely to come to market as bifacial, so that does not contradict Sun.

And she rightly points out that if you use bifacial, even at a slightly higher price, then given the improved output, that means the Levelized cost comes down, so technically the returns are higher. Duh! Sherlock would be pleased.

There are those who will want more data before they invest, but soon there will be a lot more data on bifacial outputs and as the price comes down and down it stops being a consideration – panel makers will throw them in for free, because they want the benefit of not keeping spare manufacturing lines open.

China will lead except for the slow down caused by its shift to parity, says Sun, and the US will grow fastest by percentage, if not absolute size. The Middle East will take bifacial by preference because sand makes a good host color she says.