PV Business Opportunities

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The Photovoltaic (PV) market is booming and results in numerous business opportunities benefiting also the local industry in Malaysia. The following figures presented are based on research and comparing data from REN21, Photon International, IEA-PVPS, Greenpeace, Paul Maycock, and others.

In the last seven years the overall PV market grew between 35% to 42%, and grid-connected PV exceeded 40% growth rate in the last five years. The grid-connected PV market accounts for approximately 82% (cumulative capacity ~7.6 GWp at end of 2007) of the overall installed PV capacity and is the fastest growing RE market worldwide. 18% (~1.7 GWp at end of 2007) are off-grid PV systems and few (approximately 4%) are already installed economically viable without the need for subsidies. The rest (~18%) receives financial support from NGOs, donor countries through aid program, from donor agencies, such as United Nations Programmes (e.g. Development or Educational), Global Environment Facility (GEF) or World Bank. By End of 2007 the cumulative installed PV capacity was approximately 9.3 GWp resulting in total annual revenues in 2007 of RM 75 billion

The entry barrier for PV business varies, depending which part of the value chain one targets, the investment can be up to several hundreds million US Dollars. Becoming a PV system integrator or proving service in design, consulting, and other activities is with the least barrier path to PV business. Also module manufacturing requires minimal investment - for a 10 MW production facility RM 4-6 million – and can be set-up and operated quickly. The scene is different if one targets front end manufacturing, such as polysilicon production, ingot and wafer fabrication or cell manufacturing; this can incur investment cost between RM250 up to RM450 million for a 100 MWp production facility.

Yes, the future is promising for PV business. Established PV companies are expanding significantly their production capacity and numerous new companies are entering the PV business worldwide. In some business, e.g. inverter and module, competition is aggressive and almost every month, new market entrants are trying to get a share of the booming PV market. However, before one rushes heedlessly into PV business, one has to understand and consider some important (but not limited) requirements:

Company should understand the PV value chain and the market drivers and have a regional or international network for procurement and sale of products.
Establish strong collaborations with experienced partners, e.g. JV, technical collaboration (MoA), and others.
Succeed in long-term supply contracts of source material.
Have reliable power supply, low electricity tariff and good access to talented manpower.
Reduce dependence on export market only. Create a sustainable local home market.

It is crucial to do extensive due diligence on market and close competitors. Furthermore, one has to assess one’s own financial capabilities, preferred location, infrastructure, accessibility to ports, etc. and come up with a sound SWOT analysis leading to decisions before venturing into PV business. Support on above analysis can be obtained from several international and local consulting companies and also from MBIPV team.

Please feel free to contact any of the MBIPV team, if your company has the resources to invest in PV and if you are interested to enter or diversify to the PV business in Malaysia. Please download also our ‘facts & figures on business opportunities’ for further information.