ABB_id1481
in News Departments > New & Noteworthy
print the content item

Last year was the most difficult year to date for Chinese solar manufacturers, according to a new report from solar market research firm ENF Solar.

The company says that too many new manufacturers flooded the industry in 2011, with the number of core solar chain producers (ingot, wafer, cell and panel manufacturers) rising from 807 manufacturers to 901 manufacturers.

That influx resulted in a severe price crash as producers fought to keep their factories running. In December 2011, Chinese manufacturers were selling their crystalline panels at approximately $0.92/W, but by December 2012, selling prices had plunged to $0.60/W.

For thin-film panel manufacturers, the situation was even worse, as these companies were unable to lower their cost of manufacturing fast enough, ENF Solar says. Thin-film manufacturers saw their average selling price become higher than that of than crystalline panels.

Chinese thin-film panel prices dropped from $0.85/W in December 2011 to $0.74/W in December 2012. Historically, most large customers would only purchase thin-film panels if the cots were significantly lower than crystalline panels. Therefore, much of the thin-film industry has come to a grinding halt, according to the report.

As profits vanished, many manufacturers went bankrupt. During 2012, the number of core solar chain manufacturers dropped from 901 to 704, with a particularly severe drop among panel manufacturers, from 624 to 454 manufacturers. In addition, a further 180 core chain manufacturers went idle.

In the Chinese solar sector, a small manufacturer will generally only take a customer order if it can make a profit, and will generally not produce anything until a profitable customer is in hand, ENF Solar explains. Therefore, when a bubble occurs and orders dry up completely, a small manufacturer will simply shut down and ask its employees to come back in the future when the industry is in better health.

This method is excellent for the industry's health, as it instantly takes capacity out of the market as it becomes too bloated, the report adds. Although the small players may have contributed to the solar bubble by jumping in without understanding global market supply and demand trends, they also act to remedy an unprofitable market.

ENF Solar also finds that this year is showing signs of increasing demand. As the "solar winter" ends, the industry can expect to see the re-emergence of small, idle manufacturers.


Hybrid Energy Innovations 2015

Surrette_id1409
Latest Top Stories

Mining Companies Find Value In Solar And Wind Generation

Mining companies are finding that solar and wind generation can help them defray costs and stay profitable in inhospitable parts of the globe.


Global Solar Developer UGE Finds A Rainbow In Lower Oil Prices

Urban Green Energy CEO Nick Blitterswyk says fear of oil prices is natural but unwarranted. Short-term, cheap oil actually favors project development, and the long-term trends are all going solar's way.


Nexamp Wrangles Largest Mass. Managed Growth Project For 2014

The Boston-based developer had to hustle to complete the large-scale project in bad weather on difficult terrain.


e2/ECTA Helps Dealership Go Green With 310 kW Rooftop PV System

Haldeman Ford in New Jersey turned to solar to cut electricity costs and to burnish its green credentials. The installer opted for power optimizers to reduce wiring and handle shading issues.


Market Forces Keep Solar's Prospects Undimmed By Cheap Oil

Oil prices are tangential at best in their relationship to practical considerations in the solar sector. Regulatory issues and dynamics of the maturing energy market are much more important.

Gamechange Racking_id1491
Hybrid Energy Innovations 2015
Solectria_id1450
PV America_id1480