Seismic Shifts in Solar
There's mixed news coming out of the solar industry these days, which is a lot more complicated than that cliché usually indicates.
The news seems to be pulling in all sorts of directions in the three main markets, in Europe, North America and Asia. The solar market survived a collapse in early 2009 and its recovery will continue this year. But it seems like the pieces are getting sliced and diced in a way that doesn't benefit American manufacturers all that much, and installers enjoying lower module prices would seem to benefit the most.
"Shipments grew 43 percent in a year (2009) when nobody sold anything in the first quarter, which is pretty amazing," said Paula Mints, director, energy practice and principal analyst at Navigant Consulting.
She presented the recent webinar "Market Overview: From the Challenges of 2009 to the Challenges of 2010, Solar Looks Forward" for the Solar Electric Power Association.
China and Taiwan are willing to sell at low margins which mean costs stay down, but U.S. manufacturers are at a decided disadvantage.
"A seismic shift in the industry is that it's moving to the west. They (East Asians) are willing to hold inventory and that is a real change in the industry," Mints added. Manufacturers from China and Taiwan shipped 46 percent of the solar cell total in 2009, and in 2010 this will likely increase to 60 percent or higher.
The supply/demand picture for the photovoltaic industry is unbalanced, with one region, Europe, representing 76 percent of all demand. Reductions in too-high feed-in tariffs created market upheaval in 2009.
The U.S. had moderate growth at 5 percent in 2009 over 2008, while shipments from Japan were flat over the previous year and shipments from Europe decreased by 13 percent over the previous year.
The upside for developers in the short run is lower costs. The downside for the industry, longer term, is that operating at such small margins reduces the amount of available capital needed to promote innovation.
In the meantime, the disadvantages to American-based manufacturers continue.
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Shakeout Shifts Solar's Center From Europe to China
Luxresearch report,” Shakeout Shifts Solar's Center From Europe to China” Solar Industry Will Grow to $77 Billion in 2015, but Not Before Bloodletting Resets the Supply Curve ( BOSTON, MA--Marketwire - March 9, 2010) brings out very interesting points on solar future:
Reeling from a stormy 2009, the solar market will soon see lopsided supply and demand rush back into parity, according to a new report from Lux Research. Strong demand growth in Asia and the U.S. will push the market to 9.3 GW for $39 billion in 2010, while continued price reductions will open new markets and drive solar to a 26.4 GW market in 2015 for $77 billion in revenue. Meanwhile, China -- to date a large manufacturer of solar modules and materials, but not yet a large buyer of them -- will swing into action and become the world's largest market for solar in 2015. The report underscores, however, that the renewed balance between supply and demand will arrive only after a wave of company failures and lower utilization rates.
Titled "Solar's Shakeout: Europe Loses Leadership as China Rises," the report analyzes economic competitiveness and other drivers for the industry's six major technologies: crystalline silicon (x-Si), cadmium telluride (CdTe), thin film silicon (TF-Si), copper indium gallium diselenide (CIGS), high concentrating photovoltaics (HCPV), and solar thermal -- also known as concentrating solar power (CSP).
"We found that solar's short-term pain will enable it to exceed growth expectations over the very long-term," said Ted Sullivan, a senior analyst for Lux Research, and the report's lead author. "The volume of solar installations will grow at a 23% annual rate from 2010 to 2015, but revenue will grow by just 14%, as prices fall due to remaining over-capacity. While current subsidies in China and elsewhere will help soak up some of that capacity, there will be widespread company failures throughout the value chain first."
Dr.A.Jagadeesh Nellore (AP) India