Solar crisis set to hit in 2010, 50% of manufacturers may not survive, says The Information Network

[OKIsItJustMe]

http://www.digitimes.com/print/a20090903VL200.html

Solar crisis set to hit in 2010, 50% of manufacturers may not survive, says The Information Network

Michael McManus, DIGITIMES, Taipei Friday 4 September 2009

The solar industry is at a critical stage and 50% of existing solar manufacturers may not survive 2010, according to The Information Network.

The market research firm recently noted massive inventory buildup and huge overcapacity were having a serious impact on the solar panel industry and manufacturers, and Dr. Robert Castellano, president of The Information Network has now pointed out that inventory is averaging 122 days in 2009 versus 71 days in 2008. Capacity utilization dropped to 27.9% in 2009 from 48.0% in 2008.

A key reason is increased supply from China, which added an additional 1GW of capacity. The price per watt has now dropped to US$1.80 for polysilicon-based products, which is lower than the US$1.85 level The Information Network previously thought the industry would see at the end of 2009. By way of comparison, the average selling price in the third quarter of 2008 was US$4.05 per watt.

The Information Network doesn't expect other industry players to back down from increased competition from China. Other makers are expected to increase their capacities despite the low utilization rates in order to reach economies of scale and better compete against the Chinese. The market research firm expects the industry to see a 25.7% capacity utilization rate and 133 days inventory in 2010.

…

[bananas]

1. Shakeout and consolidation - as predicted two years ago

and which will be followed by "explosive growth" a few years later:

Heads Up: Grid parity in 5-8 years, but industry shake-out could start next year
Posted by bananas in Environment/Energy
Sun Dec 02nd 2007, 10:46 AM

<snip>



<snip>

All the companies playing in the solar PV industry -- from semiconductor to PV manufacturers and from materials to equipment suppliers -- are positioning themselves for the explosive growth phase, which starts in five to seven years, O'Rourke said. Thus, we're marching toward a temporary oversupply first and then rapid growth afterwards.

The PV industry's initial growth phase (2003-2008) has seen huge growth in financing activity, with many companies vying to go public with competing technologies, and stock performance in aggregate has been strong (see figure, below). But from 2009-2012 there could well be a period of shakeout and consolidation when all stocks will tumble, even the best-positioned ones, O'Rourke predicted. "Some companies will not exist when we come out the other side, and while we can identify some long-term winners today, some that will lead this industry down the road, are probably unknown today."

<snip>

[msongs]

2. got our rooftop solar in june and no electric bill since lol so too early for price slashing nt

[bhikkhu]

3. I don't know where the energy will come from for "explosive growth"

Not that I wish for anything other than a healthy and vigorous solar power industry, but this prediction seems to follow a normal (flawed) economic analysis which says that "all other things being equal", "this will likely happen". The things assumed equal in this case are that we will have an abundance of available energy and a continued impetus for industrial growth, as was generally been the case in the last century.

[kristopher]

4. There is no evidence of any energy shortage having the characteristics you claim

None.
Not at all.
Zero.
Zip.
Ziltch.
Nada.

[bhikkhu]

8. What I would consider evidence:

a decline in overall living standards, such as a decrease in the availability of goods and services to individuals for a given amount of work. The average US household, for instance, works more hours now for less benefit than 30 years ago. Which is affected by many things and subject to many different perspectives anyway, but that's what I would consider as one kind of evidence.

Another would be to look at energy supply versus population, where you have a general plateau of supply against a steady increase in population, inevitably requiring greater efficiencies and technological solutions to maintain standards of living. In my simple case, I don't have the money for technological solutions - I can't afford a better car, I can't afford a more efficient water heater or refrigerator, I can't afford solar panels - so my solutions are more like "doing without" and "having less".

This may seem to be beside the point of the OP, but when I see "explosive growth" predicted for a new technology, I look around and see a world of people very much like me who can't afford the new technology. Perhaps there are predictions where we all become wealthier in the future and can afford to buy all the new stuff and fuel "explosive growth", but again I don't see where the energy comes from for that.

[kristopher]

11. Ok I see the perspective you have

I would say that it would be more accurate to say that the root of your observation is distribution of wealth, not a shortage of energy. There are many sources of energy, petroleum, coal, nuclear, natural gas, wind, solar, biofuels, wave/current/tidal.

Of these, the only one currently constrained is petroleum.

I'm guessing that your monthly expenses include some amount for energy, most people have electric at the very least, right.

I'm simplifying, but the way a transition like weare planning with fossil>renewables generally occurs is that existing revenue streams (your monthly payments for energy) gradually get diverted to the replacement energy sources. There are a variety of mechanisms enabling this transition but it will occur largely without you seeing any required change in your behavior.

Some people claim the transition will increase energy costs for everyone, but that is a questionable assertion. There are probably more experts who believe that the price of energy will drop because virtually all of the price of renewable energy comes from initial investment amortized over time. They feel that coming demand increases worldwide can only be hedged by distributed power sources that operate outside of upward global pressure on fuel prices. Policies that show a concrete commitment by the government to pursue a transition through to the end are especially important since they result in lower interest rates for the capital investments.

An example would be the difference between a project that is requested by a utility and one that isn't. If a utility gives a project developer a guarantee that they will purchase the developer's output for $X, then the money to build the energy facility is going to cost about 1/3 as much as if the developer plans to sell the energy on open markets. For example it could be the difference between a loan at 6% versus a loan at 18%.

The best thing you can do to support lower energy prices is to support policies REQUIRING the utilities to get some percentage of their electricity from renewable sources via a tool called a Renewable Energy Porfolio Standard.

[Odin2005]

14. New technologies advance exponentially, not linearly.

And that means the initial stages will be sluggish. According to futurist Ray Kurzweil solar is about to hit the "vertical" phase of exponential growth, and that it will take everyone by surprise because people think linearly, not exponentially.

[Fazed and Condused]

5. Is this really a 'Green Friendly' administration.....

or is it one influenced by 'Friendly Green' ($) ....This is my first post and I did not really know where to put it. If it is a topic valid for discussion, perhaps a Moderator can create a thread for it.

I need some help...

Do you all realize you CAN NOT get mortgage financing to build an alternative construction home ? You CAN NOT get financing to buy an existing alternative construction home....

so very few builders build them. And none build them to resell.

Alternative construction refers to monolithic (concrete) and geo domes , cob, earthbag, adobe homes, earthships...etc.

All of these homes utilize less man made/altered materials and provide superior protection from the elements. They can be built at a significant savings do to the natural materials used, and consume far less energy to operate. Most of the material is secured locally.

If this was truly a 'Green Administration'... financing the construction and purchase of these homes would not be an obstacle. It certainly would give the industry a needed boost.

Its a crock of well chewed manure that our Prez and his Green Czar allow this to continue yet speak about how things will change in the environmental arena.
Lip Service ? hypocrisy ? Ineptitude ? Ignorance?

There certainly is no shortage of funds available. Once again, the individual gets overlooked for the conglomerate. (Ie Banking Industry, Lumber Industry, Insulation industry, Asphalt shingle industry etc.... ) Didn't we get enough of that from the Shrub?

Does anyone know of any mortgage sources ? Had any success ? know the average speed of a north bound swallow?

Sincerely,

Frustrated with 'O'

[OKIsItJustMe]

6. Welcome aboard

Are you saying that the "http://www.irs.gov/newsroom/article/0,,id=204671,00.html">First-Time Homebuyer Credit" is available only for conventionally constructed homes?

[Fazed and Condused]

9. 1st Time Homebuyer / alternative home purchase

It is my understanding a first time home buyer would be able to receive a tax credit on the purchase of an AltHome... but you cannot get convention bank financing TO purchase the home.

How many 1st time home buyers pay in cash ? Thats the rub.... banks will not finance these homes. The same banks who received billions of $$$.

According to a mortgage broker who dealt almost exclusively with alternative homes, there were a few smaller lending organizations who, 2-3 yrs ago, would provide a mortgage. These companies were purchased by the bigger banks/lending institutions... then , subsequently shut down when the pinch went on.

Couldn't tell if that is true or not, but the lady sure gave me an earful to pass along... and, I have looked high and low for a lender with no avail.

Something is not right.

[OKIsItJustMe]

10. I believe this is what you're looking for—“What is an Energy Efficient Mortgage?”

http://www.energystar.gov/index.cfm?c=bldrs_lenders_raters.energy_efficient_mortgage
http://www.hud.gov/offices/hsg/sfh/eem/eemhog96.cfm
http://www.energysavers.gov/your_home/designing_remodeling/index.cfm/mytopic=10380

[Fazed and Condused]

12. Nope... dont think so

These are for conventional building practices only ... crazy eh ?

Homes that qualify are what I consider 'Green Lite' . But thanks for trying. Come again soon.

[OKIsItJustMe]

15. Not necessarily crazy, no

The idea behind a mortgage is that if you are unable to pay your debt, the lending agency can sell your house to get their money back.

An unconventional house may be more difficult to sell.

An otherwise conventional (but energy efficient) home may sell more easily.

[Fazed and Condused]

22. not buying 'it'

balderdash, there is hard data that supports quite the opposite.... these homes are actually more marketable.

the banking industry has a firm grip on this country, and both parties are too timid to confront it.


There is no logical reason to discriminate against alternative styles of building, especially when it is a proven method. Europe is so far ahead of us in practically every area of environmental construction (especially on an individual' level). Austrailia blows us away... and they do it with out a 'green czar'.

yet we pretend to be a leader....

watch and see... and wait for more of the same.

[FedUpWithIt All]

7. We begin construction on a small straw bale cottage this month.

We plan to live in it until we can save money to build a more permanent (solar passive) hybrid cob home.

We have been wondering, and really don't know where to look, if we could get alternative power tax breaks that are available to conventional home owners.

[Odin2005]

13. This was inevitable.

This happens in every young industry. It happened to the Internet after the Dot.Com bust.

[joshcryer]

17. It happened before, actually.

There were over a dozen different types of "internet." Those that weren't fully connected to the overall grid went away. AOL was the only survivor of the early providers.

[Dead_Parrot]

19. AOL? That doesn't bode well for solar power...

:scared:

[joshcryer]

20. Then we got Comcast, Qwest, Verizon, etc.

Looking at the history of the internet we had CompuServe (failed), The Source, Delphi online service, GEnie, MCI Mail, Prodigy, MSN, Quantum Link, AOL. Each online service did things its "own way," for the most part, with AOL, CompuServe and Prodigy being one of the first to do things "right" (connecting to the internet at large, adopting HTML, etc).

This is a much better overview than I can give: http://en.wikipedia.org/wiki/History_of_the_World_Wide_Web

Suffice to say the "dot com bust" as Kurzweil notes, was purely wall street being crazy, the actual adoption and utilization of the web was pretty much head on.

I would say this PV production aspect is closer to the early adoption of the web, rather than the "dot com bust." I think it will survive.

[Dead_Parrot]

21. Oh, quite...

...It's the prospect of opening the Sunday paper and having a bunch of 200mm silicon wafers from Suntech drop out with "Sign up today!" on them that scares me.

:)

[joshcryer]

23. To be honest, I'm more worried about China's long term polluting aspects.

The reason China and other countries might be able to produce things cheaper is that their waste disposal methods may not be up to the standards in the west.

The west will adapt, though.

[tinrobot]

16. $1.80 per watt is getting affordable.

And the article says average selling prices could drop below $1 per watt in 2010 and 50 cents per watt in 2011.

That's downright cheap. At 50 cents a watt you could do a whole house for under $10 grand.

[Kablooie]

18. They say about 1$ a watt will make it about equal to conventional power.

[hunter]

24. Coal, cheap labor, and few environmental regulations, that's what these are made of.

Meet the new boss, same as the old boss.