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

New York Raises Solar Net-Metering Caps As Part Of An Energy Initiative

Gov. Andrew Cuomo announced five significant steps to help improve New York's grid, develop more localized access to energy and encourage new business models.


Co-op Solar Procurement: Exciting Opportunity Or Grounds For Turf War?

Despite promising growth in the utility sector, further procurement of solar on utility co-op systems could be stalled.


Colorado PUC Rejects Xcel Energy's Solar*Connect Subscription Program

Citing a lack of demand and concerns over pricing, Colorado regulators wasted little time in dismissing the utility's community solar proposal.


NextEra To Purchase Majority Stake In Hawaiian Electric In $4.3 Billion Deal

If approved by shareholders and regulators, the merger of NextEra and Hawaiian Electric Industries will produce one of North America's largest renewable energy companies.


EnterSolar Completes 1.6 MW Rooftop For Long Island Distributor

NYC developer structures three discrete projects to maximize feed-in tariff and net-metering incentives.

Hybrid Energy Innovations 2015
Maynards_id1471