The global glass market is broken into several facets, including container glass, specialty glass, reinforcement glass and others. The global market is estimated at 145 million tons of glass produced in 2015. One type of glass, in particular, is expected to experience a market boom in the coming decade: flat glass. Flat glass accounts for about one-third of the global glass market, and demand exceeded $72 billion in 2015, with 65 million tons produced. The flat glass market has several end users, including the construction, furniture and automotive industries. The construction industry, specifically building windows, accounts for 70% of the flat glass market.
The solar industry accounts for only a small percentage of the flat glass market currently, but it will double by 2020, with a compound annual growth rate (CAGR) of 13%. There is tremendous growth opportunity in this area.
To put this in perspective, we expect the other end users to either maintain their place in the market or decline slightly, with the automotive and construction industries having a CAGR of 0% in the next five years and the furniture market experiencing a negative CAGR of 1%. On the other hand, the solar industry is positioned to be one of the most dynamic end users of flat glass not just for the next five years, but also for the foreseeable future.
The glass industry is poised to benefit from the growth of the solar industry, in particular, due to the fact that advances in glass and glass coatings have the potential to increase the efficiency of certain modules, thus making them more attractive to buyers. Some glass companies, such as Asahi Glass Co. and Nippon Sheet Glass Group (NSG), claim that their products can improve efficiency from 2.5% to 5.0%. Considering that efficiencies range from 6% to 20% on commercially available modules (depending on type), a 2.5% to 5.0% increase in efficiency due to glass advancements is remarkable.
The Growth Of Solar
What’s going on with the solar market in general that will lead to such growth for the flat glass market? With a renewed interest in alternative energy by many countries across the globe, demand for solar energy (and other renewables) will increase in every region in the coming decades. In 2015, approximately 57 GW of solar capacity was added to the grid, for a total of almost 225 GW of cumulative capacity. By 2020, total installed capacity will more than double. With these projections, demand for glass in the solar industry will increase as gigawatts are added. Such rapid and sustained growth in this industry will affect all facets of the solar equipment market, including polysilicon, inverters, batteries and, of course, glass.
Both first- and second-generation solar panels use glass. First-generation cells make up 90% of the solar market in general and 80% of the solar flat glass market (712 kilotons of the total 890 kilotons of flat glass produced in 2015 for solar applications). Conversely, second-generation cells make up less than 10% of the market and 20% of the solar flat glass market. However, we expect to see the most rapid growth for glass applications in second-generation cells, with a projected 940 kilotons produced for second-generation cells by 2020.
Frameless, or dual-glass, panels encapsulate the cell in glass, as opposed to the traditional polymeric backsheet with an aluminum frame surrounding it. The backsheet has been replaced by another sheet of glass, essentially doubling the amount of glass used for the cell. In fact, due to the fact that there is no frame, the glass on these panels is often slightly thicker in order to support the panel. Companies that manufacture frameless dual-paned panels claim that the products have a nicer look, are safer (due to the fact that there is no grounding needed), and enjoy a lack of potential induced degradation, making them theoretically more efficient. Frameless dual-paned panels are relatively new to the market. To date, only a few of the major companies have adopted these types of panels.
The major obstacle to frameless panels becoming more popular is that the lack of frame affects the entire balance of systems. This can be problematic for mounting systems and trackers. Some companies do offer systems for frameless panels, but these are still considered niche products.
Solar Glass Pricing
There are several different ways to approach predictive modeling for the solar glass industry. One way to think about it is to simply calculate pricing per square meter of glass and factor in growth in gigawatts of the market.
One square meter of glass will generate between 150 W and 175 W, and it takes 6 million square meters of glass per gigawatt of solar energy. Solar glass pricing has been relatively volatile over the past five years, ranging from almost $11/square meter to a major drop due to oversupply. Two major factors will play a role in the solar glass market over the next decade:
1) Pricing – We predict pricing to fall from the $11/square-meter pricing from a few years ago and level off from the low of current years and then begin to steadily rise. This will result in a growing market for the solar glass industry, particularly if added capacity stays on the trajectory on which it is currently.
2) Dual-glass panels – If dual-glass panels become more ubiquitous, the solar glass industry will grow at a significant rate.
What does the rise of solar glass mean for the flat glass market in general? Asahi, Guardian, Saint-Gobain, and NSG/Pilkington comprise over 60% of the flat glass market. All of these companies are major flat glass suppliers writ large, but the solar section of their production is very small. The industry dynamics are not currently conducive to these four maintaining their preeminence in the solar glass market. That being said, they are likely to maintain their edge in the glass market as a whole.
There are currently low barriers for companies to enter the solar glass market. With the solar industry increasing, the demand for glass will rise, and because the main glass companies are not focusing on solar glass, there is a void that can be filled with companies that are solely focused on glass products for the solar industry. Given that 70% of the modules produced today are currently built by Asian companies, we can expect to see many companies entering the market in the Asian-Pacific region due to transporting ease.
Even though solar glass makes up a small percentage of the flat glass market worldwide, we project that demand for solar glass will grow faster than any other end user of flat glass in the next five years. Due to an increased interest in renewable energy and over 100 countries instituting economic incentives for alternative energy advances, solar energy will see major growth in the coming years, and with that, advances in module technology will put a demand on solar glass that will need to be met by not only existing companies, but also new entrants to the market.
Emily Cura Saunders, Ph.D., is a senior analyst at Dedalus Consulting, a provider of market research on technology-driven industries. The information in this article was derived from Dedalus Consulting’s Alternative Energy Series.