Market to Shine on Solar Industry Through 2011

A poll of 100 solar professionals concluded the U.S. solar industry will experience strong growth in 2010 and 2011, but other studies warn that an increasingly saturated market will cause problems for the industry after that.

The "2009 U.S. Solar Industry Monitor," conducted by management consulting firm Droege & Co., found that 93% of solar professionals expect strong growth for their U.S. businesses in 2010 and 95% expect the same for 2011.

Many expect the industry to grow more than 25% in 2010 (37%) and 2011 (55%), with 65% saying the recession hasn't crushed the U.S. solar industry. The main obstacles to growth, according to the survey, are lack of financing (82%), little support from utilities (63%), lack of customer knowledge (61%) and insufficient incentives (59%).

They see more favorable legislation and increased marketing efforts as the keys to expansion of their businesses. A full 83% say they plan to step up sales and marketing communications over the coming year.

"The U.S. solar industry is positioning itself for a sales upswing in 2010 that could pave the way for aggressive expansion in the years beyond," says Sebastian Goeres, a renewable energy specialist with Droege. "Competition is fierce, and players compete mainly via cost. We see the need for leading companies to improve their operational costs and to put more emphasis on their strategic plans."

In anticipation of strong demand and harsh competition in 2010 and 2011, 60% of respondents said they will boost their U.S. supply. About half of those polled plan to increase production, while 39% plan to expanding market share through joint ventures, mergers or acquisitions.

They also plan to increase marketing communications through traditional, digital and social media techniques.

Longer Term Growth Less Certain

Another report released by PHOTON Consulting, Solar Annual 2009: Total Eclipse, agrees that the industry is set to resume its growth trajectory in 2010-2011, but warns about longer term challenges that could lead to an "ecliple" because of saturation in key markets.

The risk of an ‘eclipse' means industry players must pursue strategies that go beyond ‘volume-up/cost-down,' said the report.

And a report from Lux Research concluded that even though oversupply has forced module makers to drastically reduce prices over the past year, new players are still entering the already overcrowded industry. There's a looming shakeout and only a select few will emerge as dominant players.

The report, "Sorting Solar Module Makers on the Lux Innovation Grid," quantitatively compares 127 module makers according to their technical value, business execution and maturity.

"Unlike the battery industry, where end applications are very diverse, solar is populated by a lot of module makers all targeting the same few applications: utility, commercial and residential installations," said analyst Johanna Schmidtke.

Lux finds that improved polysilicon pricing should help cement crystalline silicon's advantage in most installation markets through next year. Players such as Sanyo Electric (SANYY.PK), SunPower (SPWRA) and Sharp (SHCAY.PK) are best positioned to pursue tailored, high-efficiency products for the residential market.

Thin-film PV will gain market share in commercial and utility markets and, aside from First Solar (FSLR), the market is wide open. Many companies are at risk and must grow capacity, deliver performance and reliability, and prove cost competitive over crystalline. First Solar will compete against crystalline for utility-scale installations in the U.S. and China.

Comments

[jgam2665:]

First Solar (FSLR) shares are getting absolutely crushed today, after a disappointing Q3 earnings report and weaker Q4 guidance. The combination triggered some extremely bearish Street commentary, and spurred at least three analysts to issue downgrades.

Oct 29 07:50 PM

[jerrydd:]

The market for PV is massive. It just it only happens for those making panels for under $1.50/wt. Those that can't do this will die.

But for those that can, the biggest market, good for 10B panels, is the home, small business/building market. Facts are fossil fuels are rising and at that price in many areas, they are cost effective.

In the US the company that comes out with a low priced panel, inverter, mounting plug and play package will be in the big bucks.

Oct 30 08:15 AM

[captainccs:]

All solar needs is a little bit of taxpayer money

taxpayer money
taxpayer money
taxpayer money

Then the solar tea parties begin....

Oct 30 09:06 AM

[keithfeather:]

If you can connect 1kw of solar capacity to the grid for $1.00, the overall balance is this:

CO2 generated to produce all the energy to install 1kw: 75 tons
CO2 avoided per year based on 300days, 8 hours, 75% output: 3 tons

So to break even at $1 per kw connected to the grid will only take 25 years to break even on the CO2 balance.

Oct 30 11:25 AM

[Buckoux:]

Solar (and wind) power: The next bubble.

Oct 30 01:50 PM

[keithfeather:]

Uh oh, I just checked the FPL specs for their big projects just completed. It looks like the connected cost is actually over $7.00 per watt! I'm shocked, shocked I tell you! That means that after you add up all the CO2 released into the atmosphere from the production of the cells, the construction of the plant, the allocated construction of all the equipment used, mining, transportation etc, that a PV plant will release 300 tons of CO2 per connected kw, and reduce emissions by 2 tons per yer per kw, so the cells will have to operate without maintenance for over 150 years just to break even! Heavens no! I am shocked!

Oct 30 03:45 PM

[rooferguy:]

Please direct me to the study that objectively shows that installing 1kw of PV generates 75 tons of CO2.


On Oct 30 11:25 AM keithfeather wrote:

> If you can connect 1kw of solar capacity to the grid for $1.00, the
> overall balance is this:
>
> CO2 generated to produce all the energy to install 1kw: 75 tons
>
> CO2 avoided per year based on 300days, 8 hours, 75% output: 3 tons
>
>
> So to break even at $1 per kw connected to the grid will only take
> 25 years to break even on the CO2 balance.

Oct 30 04:46 PM

[Road Runner:]

The article states the obvious as if it's some revelation. Of course, as solar matures, there will be manufacturer consolidation. That's true for all emerging markets. Where's the rocket science?

The article also emphasized how silicon based solar will continue to dominate the market. Anyone following solar closely would know this as some of the Chinese manufactures like YGE and TSL drive down silicon solar module prices into the range of FSLR module prices. Warning to FSLR investors.

This is why investors should stick to the established silicon based solar manufacturers. The days of some upstart becoming a major player are over. I don’t see anything new in solar development that has the potential to be revolutionary in light of falling silicon solar prices.

Oct 30 06:52 PM

[Road Runner:]

I find it very difficult to believe that there is going to be an "eclipse" (leveling off) in the solar world market in 5 years as this article indicates in the statement "… agrees that the industry is set to resume its growth trajectory in 2010-2011, but warns about longer term challenges that could lead to an "eclipse" because of saturation in key markets.".

I don’t understand how places like southern California, Texas, Florida, Italy, China, India, Indonesia, Japan, Korea, etc, etc, etc, are going to all reach saturation in just 5 years. In 5 years, the “solar party” is just going to get started in many places. There are 600 million people (2x the population of the US) in India without electricity. Building an electric grid to these people would be much more expensive than using solar to generate electricity.

So, solar prices are not going to continue to drop, and cell efficiencies are not going to continue to increase? There are 10s of billions of dollars a year going into solar research. I regularly read about promising breakthroughs in solar research that are years from implementation.

So solar incentives are not going to increase around the world as global warming becomes more obvious? Sorry many of you non believers, but the world’s ice is melting.

Installation technology is improving, but has a long ways to go. Right now about a third of the cost of solar system is installation labor. In the future, I see do-it-yourself kits available at Home Depot and Lowes.

Inverter technology is advancing quickly, but has a ways to go. So solar system prices will continue to drop and be easier to install.

Oil is going to be over $100 a barrel, and maybe much more.

Battery technology is improving quickly making plug-in vehicles better and more affordable. Solar and plug-in vehicles go together like chocolate and peanut butter – lots of synergy.

The bottom line is there are several trends that are favorable for solar in 5 plus years, but these trends are hard to quantify. Maybe being difficult to quantify leads forecasters to “shoot low” with their predictions.

Oct 30 08:04 PM

[baird:]

Keith,

So you want to give us the detailed documentation on this, last I checked the DOE website two years was the energy breakeven for the average pv panel, not sure about the co2 numbers though.


On Oct 30 03:45 PM keithfeather wrote:

> Uh oh, I just checked the FPL specs for their big projects just completed.
> It looks like the connected cost is actually over $7.00 per watt!
> I

Oct 31 07:45 PM