Lux Research Predicts Solar Sector’s ‘Imminent’ Return To Profitability


Overcapacity and poor margins have bankrupted a multitude of solar suppliers and forced corporate investors out of the market over the past two years, according to a new report from Lux Research. However, the company says the industry is set to recover quickly thanks to converging supply and demand.

Lux Research's Solar Systems Intelligence and Solar Components Intelligence team projects an industry turnaround as poor performers are shaken out of the market, leading to a drop in PV manufacturing capacity and, thus, higher margins for the survivors able to meet an expected increase in global demand.

Thanks to the bankruptcies of uncompetitive players, along with underlying financial constraints preventing capacity expansion, overall module capacity will decrease to 58 GW in 2015, the report says. Meanwhile, the growth of new markets like China will lead to an increase in global demand from 31 GW in 2012 to 52 GW in 2015.

In combination, these will lead to module oversupply of only 12%, down from 100% in 2012, the company forecasts. As a result, the report predicts module margins will recover up to 10% from their near-zero averages today.

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