Global chemical producers look to get a piece of the growing photovoltaic market

A piece of the sun

05 November 2009 00:00  [Source: ICB]

Chemical companies line up to serve the photovoltaic industry. Despite challenges, they say the long-term growth story is intact

Rex Features/Chris Eyles

WITH THE photovoltaic (PV) industry set to experience exponential growth over the next 10 years, specialty chemical and industrial gases companies are scrambling to get involved.

"The solar industry is very important for Merck [KGaA], because we see a very big future for it," says Emil Aust, the German specialty chemical firm's senior manager of ionic liquids. "This market has huge potential."

Merck is one of the world leaders in the development and production of ionic liquids, which are key raw materials used in dye-sensitized solar cell (DSC) electrolytes, notes the company.

The European Commission's Joint Research Centre's photovoltaic status report, which was released in September, said solar energy would continue to grow at high rates in the coming years.

It added that the International Energy Agency had three growth scenarios, with the most conservative predicting that PV capacity would triple by 2020.

"These projections show that there are huge opportunities for photovoltaics in the future if the right policy measures are taken, but we have to bear in mind that such a development will not happen by itself," the report stated.

Dean O'Connor, head of technology and market development for PV at German specialty gases firm Linde, says the photovoltaic gases business has been doubling yearly, and at times has grown at an even higher rate.

"Gases have increased because thin film technology uses large amounts of gases," he says. "Even if we went home and did nothing else, we would double (our PV business) next year."

And although the global economic crisis has hit the chemical industry hard, the solar industry is still seeing increased demand.

There is no doubt that 2009 has been a difficult year, but the ­photovoltaic market has been able to grow, notes Erwoan Pezron, worldwide managing director of France-based specialty chemical firm Arkema's fluoro­polymers business.

AFFECTING GROWTH
But the speed of growth for the industry in the long term has a lot to do with government initiatives and legislative support for it.

"We don't know which way the US is going to go. If the US invests heavily, it will increase demand," says O'Connor.

This sentiment was echoed by French industrial gases firm Air Liquide's worldwide business head of photovoltaic, Olivier Blachier, who says the outlook is dependent on these decisions.

"There are huge opportunities for photovoltaics in the future if the right policy measures are taken" European Commission's Joint Research Centre photovoltaic status report

And so far, the signs are positive. In October, California State Governor Arnold Schwarzenegger approved a new subsidy for the solar industry and formed an alliance with the federal government to fast track a number of renewable energy projects.

Furthermore, the G20's economic recovery plan foresees that in China, yuan (CNY) 3 trillion ($44bn) will be invested into new energy, including solar, over the next decade.

US-based chemical major DuPont expects its photovoltaic business to reach $1bn (€677m) by 2012 (up from around $250m today), partly through bolt-on acquisitions, while US major Dow Chemical believes its new solar shingles for residential housing have sales potential of around $5bn by 2015 and $10bn-11bn by 2020.

But with the opportunities to increase revenue comes necessary investment. And chemical companies are boosting outlays.

DuPont has invested $120m to expand resin capacity for its Tedlar polyvinyl fluoride film business by over 50%; Air Liquide is building air separation units in Vietnam; and Arkema has announced that it will debottleneck its Kynar polyvinylidene fluoride (PVDF) plant at its facility at Calvert City, Kentucky, US. All three want to boost their ability to serve the growing PV market.

Arkema's PVDF films are used to protect the backs of solar panels, extending operating efficiency and cell life.

Blachier says the firm has three areas of planned investment - to increase capacity at existing units as customers need it, to build new units worldwide, and to develop new products.

"We don't want to be just a gases supplier. We want to be able to provide materials and become a real partner," he says. "Wherever (our customers) go in the world, Air Liquide will be there to provide the materials."

Arkema is also developing globally to meet the downstream needs of the PV industry. Pezron says the company has major clients in Germany, but it is seeing more and more manufacturing in Asia.

Lucy Craymer is ICIS news deputy news editor - Europe. She has also covered insolvency and legal disputes for New Zealand business publication the National Business Review.

By: Lucy Craymer
+44 20 8652 3214

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