Market Reports Only the Strong Will Survive in the Solar Industry

The solar industry is at a critical stage and 50% of existing solar manufacturers may not survive 2010 according to the report Opportunities in The Solar Market For Crystalline and Thin Film Solar Cells, published by The Information Network, a New Tripoli, PA-based market research company.

"In our Press Release of July 31 we noted that massive inventory buildup and huge overcapacity were having a serious impact on the solar panel industry and its manufacturers," noted Dr. Robert Castellano, president of The Information Network. "To reiterate, inventory is averaging 122 days in 2009 versus 71 days in 2008. Capacity utilization (amount of production capacity actually produced) dropped to 27.9% in 2009 from 48.0% in 2008."

1. China's solar panel manufacturers, exasperating the situation by adding an additional 1 GW of capacity, are already dropping prices to $1.80 per watt for polysilicon-based products, which is lower than the $1.85 level we projected back in March for the end of 2009. By way of comparison, the average selling price in Q3 2008 was $4.05 per watt.
2. Because of economies of scale, whereby the more solar panels manufactured, the lower the cost to make them, other manufacturers will increase capacity to their planned 2010 levels in order to compete against the Chinese. We will now reach the last column in the table below - 25.7% capacity utilization and 133 days inventory.
3. Average selling prices could drop below $1 per watt in 2010 and $0.50 in 2011.
4. As many as 50% of the more than 200 solar manufacturers, mired in red ink with current selling prices above $2.00 per watt, may not survive

Solar panel manufacturers that have reported loses just in the past few weeks include Energy Conversion Devices Inc, JA Solar, LDK Solar Co., Q-Cells, ReneSola Ltd., Solar Power Inc., and Yingli Green Energy Holding Co. Ltd.