ANALYSIS
Solar panel suppliers that are fully integrated, i.e.
those that produce their own raw materials and
components, are expected to suffer less than their
non-integrated competitors. Such integrated
companies are better able to reduce margins over
a large value chain and thus still remain
competitive.
Some, like First Solar and REC Solar may even be
able to use their cost structure and capacity to
generate profitable gross margins in 2009, even at
Issue I 2009
pricing of $2.50 per watt.
Another company likely to weather the solar storm
better than its competitors is SunPower, which has
succeeded in creating a successful high quality
panel brand. SunPower, along with Sharp and Q-
Cells, also have invested in installation firms, which
-pv-management.com should help them maintain higher-than-average
Global PV Module the race to larger manufacturing scale comes to an pricing in 2009.
.solar
Supply (Production) end when the product is not sold anymore.”
www
and Demand Presenting this oversupply situation, we often get
(Installation) Sunburned suppliers the comment that “companies will reduce
38
Virtually all crystalline silicon solar cell and panel production as soon as inventories build up”.
suppliers are expected to feel the impact of the While we agree in general that companies will
revenue plunge. These companies will suffer delay and reduce their production when
significant declines in revenue in 2009, iSuppli inventories build up, the solar industry is still living
predicts. Most will see their inventories balloon, on “expectations”.
and virtually all of them will post losses and
negative cash flow for the year. The daily business shows that expectations remain
high, while demand is vague and “potentials” are
“Newer Chinese and Taiwanese suppliers will be changing fast. Promising news from US, France or
hit particularly hard because they have invested Italy continue to fuel these expectations on the
heavily in both PV panel, cell and wafer next solar run. And this is what keeps production
production, areas where massive oversupply is running at full speed!
expected,” Wicht said.
Cell and module manufacturers will not want to
slow production unless they face severe cash
problems. The industry is still in the mood that
slowing production means less economics of
scale, higher cost and loss of competitiveness.
The companies do not want to be the first to slow
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