Market conditions dim; brake lights ahead
lically traded companies shows a whopping real estate equity continues to vaporize. In consumers’ purchasing decisions.
144% Y/Y growth for 2Q’08 versus 2Q’07 2007 the world installation market share There is a silver lining...the slowdown
(Chart 4). was 3GW, which was roughly divided be- will bring opportunities
Recently, the global credit crisis is caus- tween 49% Grid-Commercial, 28% Grid- The U.S. dollar strengthened against
ing concern that solar venture capital has Residential and 13% Grid-Utility with the the NT (Chart 7) and Euro (Chart 8),
slowed and may force many companies to remainder Off-Grid. Navigant Consulting making U.S. imports less expensive and
terminate or mothball future expansions. expects Grid-Utility installations to grow outsourcing more attractive for U.S.-based
According to research from New Energy conservatively at a CAGR of 41.74% from companies. Material prices are also falling
Finance, worldwide project financings for 387MW in 2007 to 2.2GW in 2012 or at as demand withers. Copper (Chart 9) prices
new construction of alternative energy a CAGR of 58.6% to 3.9GW (accelerated) have fallen as tepid demand remains in the
projects fell to US $17.8 billion in Q3 vs. or 17% market share. Grid-Residential construction industry. In addition, China’s
US $23.2 billion in 2Q and the slide is is expected to increase at a conservative GDP (Chart 10) has tempered, which will
expected to be sharper in Q4 and next year CAGR of 36% from 857MW in 2007 to slow the inflationary pressures of rising
(2009). 3.9GW in 2012 or at an accelerated CAGR labor costs, power outages and material
GDP growth is now expected to bot- of 52% or 6.9GW during the same time shortages.
tom in 2009 (Chart 5) as the USA, Europe frame with 30% market share. Assumedly, A slowing economy will also force
and Japan currently border on recession. these forecasts were based on a healthy industries to become more LEAN and effi-
2010 is now viewed as the ‘recovery’ year. financial market. cient which may include shifting produc-
Concern and caution may be needed Credit tightening coupled with tion (equipment, inventory, distribution)
during these uncertain times now that oil diminished equity and unprecedented to contract manufacturers such as Flextron-
prices (chart) have returned from their foreclosures has sidelined many unneces- ics (Chart 11) or Sanmina-SCI (Chart 12).
summertime high of US $147 to around sary investments that do not have immedi- A new, alternative-energy-friendly
US $70/barrel, the global credit market ate ROI, and government-driven incentive administration in the U.S. coupled with
has entered a deep-freeze (Chart 6), and programs may not be able to influence aggressive worldwide capital injection may
20080810 20081025
World Photovoltaic Market
Solar/Photovoltaic Financials
Composite of 21 Public Companies
Revenue, Net Income & Inventory
US$ Billions
80
US$ (Millions)
3500
70
Note: Chinese RMB converted to US$ +144%
70 3000 @ constant average 2007 exchange
2500
60
55
2000
50
43 1500
40
34
1000
30 27
500
22
0
20
-500
10
1 2 3 4 1 2 3 4 1 2
06 07 08
Revenue 311 466 630 799 870 1217 1693 1934 2205 2967
0
Income -27 23 100 9 -27 86 177 167 254 393
Inventory 191 259 398 551 832 975 1038 1284 1591 1832
2007 2008 2009 2010 2011 2012
Akeena Solar, Ascent Solar Technologies, Canadian Solar, China Sunenergy, DayStar Technologies, Emcore, Energy
Conversion Devices, Evergreen Solar, First Solar, JA Solar, LDK Solar, Satcon Technology, Solar Enertech, Solarfun, Power,
Lux Research 5/08 Spire, SunPower, Suntech Power, Trina Solar, Yingli Green
Chart 3. Chart 4.
20081012 20081024
GDP Growth
Spot Oil Prices - US$ & Euros
Constant $ Growth Rates Converted @ Constant Exchange Rates
W Texas Intermediate Crude
Price/Barrel
150
2006 2007 2008 2009 2010
140
US$
World 4.1 3.9 2.5 1.8 3.6
130
Euros
120
110
USA 2.8 2.0 1.6 0.6 2.7
100
90
80
EU 3.2 2.9 1.0 0.4 2.0 70
60
50
Japan 2.4 2.0 0.7 0.6 2.2
40
30
Four Tigers 5.0 5.3 4.1 3.4 4.8
20
10
0
China 11.4 11.6 9.7 7.0 8.8
1 7 1 7 1 7 1 7 1 7 1 7 1 7 1 7 1 7 1 7 1 7 1 7 1 7 1 7 1 7 1 7 1 7 1 7 1 7 1 7
89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08
Henderson Ventures 10/2008
CALENDAR YEAR
www.hendersonventures.com
http://research.stlouisfed.org/fred2/series/oilprice
www.nymex.com/lsco_fut_cso.aspx
Chart 5. Chart 6.
www.globalsolartechnology.com Global Solar Technology – November/December 2008 – 13
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