Watch for fallout in equipment companies as solar crisis hits in 2010
PC's Solar Photovoltaics Blog
Solar equipment companies will feel the impact of a looming solar industry crisis in 2010 according to the report: Opportunities in The Solar Market For Crystalline and Thin Film Solar Cells, published by The Information Network.
“Inour release on September 3, we forecast that in 2010 the solar industrywill exhibit capacity utilization of 25.7 percent, inventory will bestretched to 133 days, average selling prices could drop below $1 perwatt in 2010 and $0.50 in 2011, and as many as 50 percent of the morethan 200 solar manufacturers, mired in red ink with current sellingprices above $2.00 per watt, may not survive,” noted Dr. RobertCastellano, President of The Information Network.
In additionto the failure and consolidation of the solar panel manufacturers,companies supplying equipment to manufacture panels will be severelyimpacted. Two things will happen. The obvious impact will be the lossof customers of equipment suppliers.
Solar manufacturers, intheir exuberance to increase capacity from 17.6GW in 2009 to 24.2GWwill initially purchase equipment only to have it sit idle in factoriesas inventory stretch to 133 days. As these companies close orconsolidate, this equipment will then be sold on the secondary market,further exasperating revenue growth for equipment vendors.
Currently,the equipment companies are experiencing a slowdown because even thoughsolar customers want to buy, financing is still tight. Going forward,the largest solar manufacturers will survive as a customer base.Chinese solar manufacturers, who prefer to purchase low-cost equipmentfrom Taiwan, will also survive, as the Chinese government willsubsidize their survival by stimulus packages, generous subsidies, freeland, and cash for R&D.
Solar panel manufacturers that havereported losses just in the past few weeks include Energy ConversionDevices Inc, JA Solar, LDK Solar Co., ReneSola Ltd, Solar Power Inc.,and Yingli Green Energy Holding Co. Ltd.
“Interestingly, fiveof the six companies are Chinese. They continue to increase inventory,lose money, and affect the entire solar panel industry. Perhaps, it isan attempt to become the worldwide leader in the solar market byeliminating the competition,” added Dr. Castellano.
In 2008, the top 10 equipment manufacturers of the $4 billion market were:
Table: Ranking of Top 10 Equipment Manufacturers
Source: The Information Network, USA
Applied Materials and GT Solar are the only two U.S. manufacturers in the top 10.
