Heightened awareness about environmental conservation, prevention of global warming and relentless increases in fuel prices are all major catalysts for the development of alternative fuel resources. The use of solar power has grown dramatically over recent years and this has helped spur the global solar cell industry as numerous countries have instituted polices promoting this renewable energy resource through a number of incentives. Examples include tax credits granted by the US and feed-in tariffs granted by the EU to encourage the adoption of alternative power systems. In 2007, the total installed solar power capacity globally totaled 2,826 megawatts, increasing 62 percent over 2006.
At present, the photovoltaic production is being constraint by the supply of the polysilicon substrate, an important primary raw material. A shortage of polysilicon since 2005 allowed solar cell manufacturers who had either been able to secure sufficient stocks of polysilicon, or had entered into long-term contracts with polysilicon suppliers to meet demand in the market. In Thailand, the solar cell industry is dominated by SME manufacturers. Their ability to secure sufficient raw materials and find long-term raw material supply sources are challenges that sometimes inhibits them from accepting purchase orders from customers.
The solar cell business in Thailand is mainly export-oriented due to the small domestic market. KASIKORN RESEARCH CENTER (KResearch) holds the view that the potential markets for solar cell panels in Thailand include the use in office buildings, factories, hotels and resorts. Growth in the domestic solar cell market will depend somewhat on government policies. It is expected that exports of Thai-made solar panels will be bright, thanks to strong demand from Japan and Europe. KASIKORN RESEARCH CENTER expects that global demand for photovoltaic panels during the period 2008-2010 will grow over 45 percent per year.
Meanwhile, it is expected that Thai solar panel manufacturers will face many challenges in the future, such as intensified competition in the world market due to higher production capacities realized by existing and new entrepreneurs, plus an expected decline in the prices of solar panels due to a greater supply of raw materials and technological advancements. On the demand side, the cost of electricity generated by solar panels – that will eventually become as competitive as conventional energy resources in the future – should help spur growth in the market. The heightened competition combined with the fall in cell price, would force Thai entrepreneurs to find ways to achieve economies of scale and develop innovative products. The government sector can assist this industry by offering tax incentives and investment promotion privileges.
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