The solar energy industry experienced a series of market-changing events in 2009 that redefined the rules of the game and, therefore, altered the competitive landscape, according to a new report from Pike Research.
Starting in late 2008, the solar market shifted from supply-constricted to demand-driven within a few quarters due to the plunging price of crystalline silicon cells and modules spurred by falling polysilicon cost, constrained availability of credit, Spain's dramatic demand decline, and the growth of thin-film supply and market share.
Although solar demand will experience strong growth this year, these events have had a strong influence on which companies will lead the industry in 2010 – and beyond – and which will face low profit margins and possible consolidation, the report predicts.
‘The solar market is now faced with a gross oversupply of modules,’ says senior analyst Dave Cavanaugh. ‘The industry is currently supplied by more than 190 cell and module manufacturers, making consolidation of weaker competitors an inevitable outcome.’
In the meantime, overcapacity and intense competition will create downward pressure for module average selling prices, which will accelerate grid parity for the cost of solar-produced power to the 2013 time frame in many markets, Cavanaugh adds.
Pike Research forecasts that worldwide solar demand, driven by lower costs and greater availability of credit, will increase to 10.1 GW this year – a year-over-year increase of almost 43%. Solar market demand will exceed 19 GW by 2013 – a 25% compound annual growth rate from 2010. This growth is expected to be driven by demand from the U.S., Italy and China, in addition to steady demand from Germany and demand growth in a number of smaller countries.
However, excess module supply could easily reach 8.3 GW in 2010, even accounting for reasonable utilization rates and moderate capacity growth, according to the report. This year and beyond, the most important competitive differentiators for successful solar companies will be low cost per watt, module efficiency and moving down the supply chain.
For more information, visit www.pikeresearch.com.
SOURCE: Pike Research