The solar energy market has undergone a dramatic transformation over the past two years, driven by a new abundance of polysilicon, the effectsof the worldwide financial crisis, and the plunging price of solarmodules.
As a result of these factors, the solar industry hasshifted from supply-constrained to demand-driven, and a few strongcompanies have been able to improve their revenues and market sharebased on a low cost per watt combined with high module efficiency.
According to a new report from Pike Research, this market realignment will setthe stage for a new era of solar growth over the next several years, and the cleantech market intelligence firm anticipates that by 2013, inmany markets, solar costs will reach the long-elusive goal of gridparity, the cost of electricity from traditional power sources. Between2010 and 2013, Pike Research forecasts that solar demand will increaseat a compound annual growth rate (CAGR) of 24 percent.
“Solarprices are plunging quickly, and lower pricing will fuel a surge indemand in 2010 and beyond,” says senior analyst Dave Cavanaugh.“However, pricing trends and oversupply of solar modules will also place huge pressure on solar suppliers, especially Tier 2 and Tier 3companies that are not well-equipped to weather the storm. We expect asignificant shakeout among solar suppliers in the next two years.”
Cavanaugh adds that 10 key factors will determine success and survival for solarsuppliers during this period of industry consolidation:
*Low-cost polysilicon and wafers.
* Low-cost process materials.
* Module efficiency.
* Economies of scale.
* Market presence in key growth countries.
* Supply chain integration.
* Strong balance sheets and internal financing of growth.
* Modulemanufacturing in North America and low-cost European Union countries.
* Strong position in niche markets.