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Solar industry bound to collapse, report claims

Half of the existing solar manufacturers may not survive through the end of next year.

The somehow surprising forecast comes from market research firm The Information Network, as reported by DigiTimes and other internet sources.

Information Network chief Robert Castellano is said to believe that “massive inventory buildup and huge overcapacity” are having a serious impact on solar panel manufacturers. The industry is up to 122 days of inventory, from an average 71 days in 2008, he reports. Capacity utilization in the industry is down to 27.9%, from 48% last year.

A key issue, he contends, is increase supply from China. As they have ramped up, ASPs have dropped to $1.80 per watt, from $4.05 in Q3 2008. And he expects the trend to continue, with more capacity coming on line as manufacturers seek economics of scale. The result, he thinks, will be worse conditions still: he expects inventory to stretch to 133 days next year, with utilization falling to 25.7%. ASPs, he predicts, could drop below $1 a watt next year, and to 50 cents a watt in 2011. If that happens, he says, up to half the more than 200 solar manufacturers won’t survive.

Such a dark picture is surprising enough: it was commonly believed the solar industry was having a strong push because of the financial crisis and the environmental concerns about climate change and global warming. The very stimulus package set up by the Obama administration contains aids for the solar industry, as financial support to families and businesses turning solar.
Most European Union Member States do have such financial help schemes.

The actual collapse of the solar industry forecast by The Information Network comes as a wake-up call to reality.

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This entry was posted on September 8, 2009 by in News, Technology and tagged , , .
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