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This is the second year in a row that research and development (R&D) spending by 21 leading PV manufacturers (excluding Trina Solar and JA Solar) has exceeded the

billion. They stand at $1,067 million compared to $1,087 million in 2017. These expenditures have doubled in five years.

A slowing trend in spending is emerging. In 2014 out of 2013, only two companies had reduced their spending; in 2018, eleven companies reduced spending, exceeding for the first time the nine that increased spending. This is due to the Chinese government's May 31 measures that shut down new facilities.

Two companies (First Solar and Yingli Green) have reduced spending for four consecutive years since 2015. Two other companies (Eging PV and Hareon Solar) have reduced spending for three consecutive years; two others (ZJ Sunflower, Wuxi Suntech) have reduced spending for two consecutive years.

Two companies (First Solar and Yingli Green) have reduced spending for four consecutive years since 2015. Two other companies (Eging PV and Hareon Solar) have reduced spending for three consecutive years; two others (ZJ Sunflower, Wuxi Suntech) have reduced spending for two consecutive years.

Some companies have increased their R&D efforts.Two companies (LONGi Group and Zhongli Talesun) have steadily increased their R&D spending since 2012. Others have increased their investments in 2018 : JinkoSolar, Canadian Solar, SunPower, Tongwei, Hanergy Thin Film, URE, TZS and Comtec.

The companies are divided into four groups:

1°) Five companies (First Solar, LONGi, Hanergy Thin Film, SunPower and GCL) constitute the leading group in R&D spending. They have spent between $400 and $600 million over the last five years. They are separated from the rest of the sample by a minimum of US$100 million in cumulative R&D spending over the last five years.

In the 2018 rankings, SunPower has lost two places to LONGi and Hanergy Thin Film, as the latter two have experienced rapid growth in R&D spending over the past three years. It was about to lose a third place to GCL, but GCL has significantly reduced its R&D spending in 2018.

2°) Zhongli Talesun, TZS and Tongwei Group constitute a second powerful group accelerating R&D spending in recent years, spending between $200 and $250 million over the next five years.

3°) The acceleration of R&D spending by Risen Energy, JinkoSolar and Canadian Solar over the last two years will enable them to move ahead of Yingli Green very quickly, but they remain at a respectable distance from the previous group with a cumulative amount of $120 to $180 million over five years.

4°) The companies following Canadian Solar invest so little in R&D that a gap is widening between the leading companies and the others.

Research & development as a percentage of turnover :

Traditionally, companies invested between 0.8% and 3% of their turnover. First Solar and SunPower have always been exceptions with higher percentages. Now the gap between the companies has widened. This is due to the proprietary technology of these two groups, which requires higher expenses as a percentage of turnover. At the same time, the low R&D rates of JinkoSolar and Canadian Solar (two of the world's largest panel manufacturers) have little effect on their place in the ranking.

The chart below groups the integrated manufacturers LONGi, TZS and GCL. LONGi and TZS have increased their sales rapidly, which has reduced the R&D/sales rate.

It emerges that the emerging players are those with high R&D expenditure over five years.

https://www.pv-tech.org/editors-blog/rd-spending-analysis-of-21-pv-manufacturers

PV Tech's blog of August 19th

Editor's note The analysis of research and development spending allows us to determine the near future of the companies concerned. The relative weakness of First Solar's and SunPower's R&D partly explains their operating losses and more generally the decrease in their economic influence in recent quarters. LONGi's efforts are reflected in the emergence of this company. Conversely, GCL's low investments explain the group's difficulties and its relative decline among manufacturers.

There is therefore a strong correlation between the rate of R&D spending and the three or four-year future of the companies.

A nuance must be made between fully integrated companies and those that only assemble panels: the latter seem to have less need for a high amount of R&D, which would explain why they are part of the 3rd group.