How will the photovoltaic ribbon industry develop?

—-Demand has entered a period of rapid growth, and product technology iterations are in progress

1 photovoltaic ribbon: photovoltaic auxiliary materials in the “small industry, big market”

1.1 Photovoltaic ribbon is an important part of the PV module

Photovoltaic ribbon, also known as tinned copper tape or solar tabbing wire. It is an important component of photovoltaic modules and is used for the connection of photovoltaic cells in the package. It leads the electrical energy converted from light to silicon wafers to electrical devices and plays an important role in conducting and collecting electricity to increase the output voltage and power of PV modules.

The PV cell wafer connected by the PV ribbon is encapsulated by EVA film, PV glass, backsheet, frame, and other materials to form the PV module, which is then directly applied to the construction of the PV power generation system. The quality of PV ribbons is related to the transmission efficiency and service life of photovoltaic modules. The size, mechanical properties, surface structure, resistivity, and other performance indicators of PV ribbons are important factors affecting the efficiency of PV power generation, the fragmentation rate of PV cells, and the long-term reliability and durability of PV modules.

Photovoltaic module manufacturing, which is made of photovoltaic ribbon, is in the middle of the industry chain. The photovoltaic industry chain mainly consists of silicon materials, silicon wafers, cells, PV modules, and PV application systems, with the upstream of the industry chain mainly being silicon materials and silicon wafers; the midstream mainly being cells and PV modules; and the downstream being PV application systems.

1.2 A wide variety of photovoltaic ribbon products

There are various types of photovoltaic tapes to meet different characteristics. And they can be divided into interconnection tapes and convergence tapes according to their application direction. Interconnection tape is a tin-coated solder tape used to connect PV cells and collect and transmit PV cell current. It is connected to the front grid line and the back grid line of the cell, connecting the positive and negative poles of the adjacent cells, forming a series circuit to transfer the electrical energy from the cells to the electrical equipment, and also plays a role in heat dissipation and mechanical fabrication.

Sink tape is a tinned solder tape used to connect PV cell strings and junction boxes to transfer PV cell string current, which connects numerous cell strings to achieve a complete current path. For conventional PV modules, the consumption ratio of interconnection tape to sink tape is about 4:1; for multi-gate modules, the consumption ratio of interconnection tape to sink tape is about 5:1.

According to the performance and application fields of PV tapes, interconnection tapes mainly include conventional interconnection tapes, MBB tapes, low-temperature tapes, low-resistance tapes, etc.; convergence tapes mainly include conventional convergence tapes, punching tapes, black tapes, bending tapes, etc.

1.3 Copper and tin raw materials account for the higher cost of solder tape

The main raw materials for the photovoltaic ribbons are copper and tin. They are composed of a base material and a surface coating. The base material is copper of different sizes and requires precise specifications, good electrical conductivity, and certain strength. The surface coating is tin alloy, which can be coated with tin alloy and other coating materials in a certain composition ratio and thickness evenly on the surface of the copper base material using special processes such as electroplating, vacuum deposition, spraying or hot dip coating. Since the copper substrate itself does not have good soldering performance. The main function of the tin alloy layer is to make the tabbing wire meet the solderability and to firmly weld the photovoltaic ribbon to the main grid of the cell, so as to play a good current conductivity.

The cost of PV ribbon is directly linked to copper and tin prices.

Copper and tin prices shocked lower, and the cost of photovoltaic ribbons further declined. Copper prices. As the U.S. CPI is expected to rebound, the Biden administration insisted that anti-inflation is the top priority of the economy. The market is expected to further accelerate the Fed rate hikes. On the macro-side negative factors to further ferment and supply-side disturbances to ease the background, copper prices are oscillating down from tin prices.

2 High-speed development of photovoltaic, bringing a high boom in the welding tape industry

2.1 Installed costs have dropped significantly and the era of grid parity has arrived

The cost of PV module is mainly divided into silicon cost, i.e. cell cost, and non-silicon cost, i.e. cost other than the cell, including the bezel, glass, EVA junction box, backsheet, and solder tape, etc., of which the cost of PV solder tape only accounts for about 2.7% of the total cost of PV module, as an important material for conducting electricity on PV module, PV solder tape is mainly made of the copper substrate, tin alloy coating, and flux processing, and its raw material cost accounts for more than 90% of the total cost of PV solder tape.

As an important material for conducting and gathering electricity on PV modules. PV solder tape is mainly made of copper substrate, tin alloy coating, and flux. And its raw material cost accounts for more than 90% of the total cost of PV solder tape. So the downstream acceptance of PV solder tape price is high. And the cost change brought by the increase in raw material price can be transmitted to the demand side through the price increase.

The cost of photovoltaic kilowatt-hour electricity has dropped significantly, and the era of grid parity has begun. The cost of renewable energy generation is represented by solar photovoltaic and wind energy. It is gradually declining due to policy support and industrial development. With the continuous optimization of photovoltaic power generation technology. The cost of photovoltaic power generation dropped by 82% from 2010 to 2019, according to IRENA statistics. The lowest cost of bidding for photovoltaic projects worldwide has dropped to 1.32 cents/kWh in 2020. By 2020, the cost of photovoltaic power generation will be lower than that of wind, nuclear, and other traditional power generation modes.

2.2 Silicon prices are expected to go down to ease downstream cost pressure

In the second half of 2021, polysilicon prices continued to rise after a rebound, rising from $27/kg to $29/kg and then reaching $35/kg by the end of the first half of 2022. While monocrystalline PERC module prices also increased from $0.25/watt to $0.28/watt in the second half of 2021 and then decreased to $0.27/watt by the end of the first half of 2022. The average price level is still increasing.

2.3 Photovoltaic power generation accounts for a low percentage, with vast room for improvement

With the promotion of “carbon neutral” in many countries, the development of renewable energy represented by photovoltaics has become a global consensus. And the proportion of renewable energy in the power structure is increasing. It can promote the rapid growth of the installed capacity of photovoltaics. In 2020, PV power generation will account for only 3.1% of the total power generation capacity. And there is still much room to increase the penetration rate. 39% of the new installed capacity of renewable energy will be generated by PV power generation in 2021. It is the highest proportion of new installed capacity among renewable energy, reflecting the potential of PV industry development.

The global PV market will maintain rapid growth, and the domestic market is expected to continue to grow. Along with the gradual elimination of the negative impact of the new crown epidemic. And the global PV market will maintain rapid growth, driven by the continued decline in PV power generation costs and the strong pull of emerging markets.

According to CPIA data, the global installed PV capacity will be about 170GW in 2021. An increase of 31% year-on-year. And we expect that the CAGR of the global installed PV capacity from 2021 to 2025 will be 26.84%.

The PV application market is highly concentrated, and emerging markets are growing rapidly. According to the International Energy Agency (IEA) released 2021 global PV report data. The top ten countries in the world in 2021, the amount of new PV installed is 129.1GW. Accounting for 73.77% of the global new installed capacity in 2021. Among them, China will have 54.9GW of new PV installations in 2021. Accounting for 31.37% of the global PV installations still maintains its position as the world’s largest PV application market.

3 Industry cost reduction and efficiency improvement, welding tape technology iteration is underway

3.1 Component technology iteration, photovoltaic welding tape is still the mainstream

Photovoltaic tape is the mainstream solution for cell connection. At present, the mainstream PERC modules are mainly connected to the cells through photovoltaic welding tape, while the future development direction of modules mainly includes TOPCon modules, heterojunction modules, stacked tile modules, MWT modules, and so on.

From the perspective of cell connection, the connection method of stacked tile modules and MWT modules is less dependent on PV tape, but it is difficult to completely replace PV tape connection due to research instability and high investment in equipment innovation. The development of heterojunction modules and TOPCon modules, which rely on photovoltaic welding tape as the main connection method, has a large market space, and photovoltaic welding tape has a low cost, high welding reliability, and good electrical conductivity, and still has a strong competitive edge. According to the China Photovoltaic Industry Association forecast, from 2022 to 2030, PV tape is still the mainstream solution for future cell connection and will continue to dominate the entire PV module market.

3.2 Multi-grid technology development, guiding the transformation of welded tape to MBB welded tape

Multi-Busbar technology, also known as MBB (Multi-Busbar), usually refers to 6 or more main bars. The increase in the number of main grid lines can make the grid lines thinner. Thus reducing the shading on the cell surface. At the same time, it shortens the current conduction distance on the thin grid. It can effectively reduce the series resistance of the module. Because the width of the main grid lines and thin grid lines is reduced. It can also significantly reduce silver paste consumption. In addition, the multi-busbar technology has strong compatibility. And it can be stacked with polycrystalline, monocrystalline, black silicon, PERC, TOPCON, HJT, double-sided, single glass, double glass, and other mainstream technologies. Double-sided, single glass, double glass, and many other mainstream technologies. In the past two years, with the continuous optimization of cell and module technology. The existing products in the market have achieved the popularization of MBB.

The development trend of the photovoltaic ribbons industry has made MBB become mainstream. According to the data of the China Photovoltaic Industry Association, the proportion of cells with 9 main grids and above will increase by 22.80% to 89.00% in 2021 compared with 2020, which has become the mainstream of the market. In the next few years, the proportion of cells with 9 grids and above will further increase and is expected to completely replace 5 grids cells. MBB welding tape, i.e. multi-grid welding tape, is a cylindrical structure of interconnection welding tape, with a diameter between 0.2mm-0.4mm. It is more conducive to PV module efficiency and cost reduction than conventional welding tape and has gradually become a mainstream product in the market.

3.3 Further update of multi-master grid technology, mainstream technology switching to SMBB

The most obvious feature of SMBB tape is its smaller inner diameter, generally less than 0.25mm. The amount of copper used in SMBB tape will increase. And the thinner tape will result in less tape weight and lower unit cost per watt. And the thinner EVA film covered by SMBB will bring more gross margin to the manufacturer. Based on the conventional size, the unit consumption of 0.29mm thick MBB solder tape is about 520 tons per GW. So we assume that the thickness of SMBB solder tape is 0.25mm, and accordingly, the unit consumption is about 425 tons per GW. And the total cost of a single GW is significantly reduced from RMB 40.54 million for MBB solder tape to RMB 31.82 million, a 21.53% reduction.

SMBB tape will become the mainstream tape type. The key to reducing costs and increasing efficiency in high-efficiency cell technology is metal optimization. So continued iterations of cell string welding technology and the use of finer metallized grid structures will be the future trend of PV tape development. Therefore, we assume that the market share of conventional welding tape will decrease year by year. MBB welding tape has matured in recent years and will be gradually replaced by SMBB. SMBB is expected to have a low market share in 2021. But due to its downstream cost reduction and the historical experience of MBB’s rapid expansion. SMBB’s market share is expected to rapidly increase to replace MBB and conventional solder tapes and become the mainstream interconnect type.

3.4 No main fence technology development to drive the development of high precision low temperature welding tape

The main gridless technology can further reduce the cost and increase the efficiency of the battery. By removing the main grid and leaving the thin grid, replacing the silver main grid with specially coated copper wires. And allowing more and finer solder strips to connect directly to the thin grid of the battery. It can reduce silver consumption, and expand the area of the battery subject to light generation. It also can reduce hidden cracks, reduce resistance losses, and achieve cost reduction and efficiency improvement of the battery. There are two main ways to implement gridless technology. One is to replace the main grid with a copper conductive film. And the other is to replace the main grid directly with copper wire.

No main grid technology requires higher precision micron-level, low-melting point solder tape, driving PV ribbon companies to refine their research and development.