Sunpower panel

Solar Panel Industry Consolidation

It is expected that, of the 120+ Solar Manufacturers in the world, perhaps 25 will survive the world wide consolidation currently taking place.  Even though Solyndra has made headlines for a year, many other notable companies have exited the business or gone bankrupt.  Here are a few in the past year or so:

  1. BP   Exited the business
  2. Solyndra
  3. Evergreen
  4. Spectrawatt
  5. PhotoWatt
  6. Solon
  7. Energy Conversion Devices
  8. Scheuten Solar
  9. Odersun
  10. Q-cells
  11. Soltecture
  12. Sovelllo
  13. Konarka Technologies
  14. Novasolar
  15. Global Solar
  16. Abound Solar

According to the NYTimes, “Many of the problems that forced solar company Solyndra to shutter operations threaten other businesses in the sun-power industry, with more upheaval likely in the coming months, analysts say.”  The Bankruptcy of Solyndra was just a starting point.  In our view, a $6/watt technology can’t compete in a $1/watt world, regardless of ease of installation.

The pressure is on.  According to Green Chip Stocks, “Other big high cost players in Europe and Japan like Solarworld and Sharp are too showing signs of bankruptcy with their share prices flirting with new all time lows…LDK is a bankrupt company, onthe only reason it continues to produce a solar panel is because of the Chinese Government support.”

According to Forbes, “Suntech Power Holdings (STP), one of the world’s largest producers of solar panels, said this week that in order to cut production costs and operating expenses, it was shutting down some of its solar cell production capacity at its Jiangsu province headquarters, the China Daily reported on Wednesday. Their share price is down over 50 percent year to date.  The paper also said that Trina Solar (TSL) plans to cut about 200 employees at the management level and LDK Solar (LDK) said it is going to cut a whopping 5,554 employees, or 22 percent of its staff.”

It is hard to tell who will be the survivors but one thing is certain, in a world flooded with a commodity product, product differentiation, product cost or product quality are the three main ingredients to success.  Acccording to the NYTimes, ”

Finding niches

Companies that are succeeding in the market are mostly those who make a product different from their competitors, Linn said. Two that appear strong are SunPower Corp. and First Solar Inc. San Jose, Calif.-based SunPower makes modules that are relatively high cost, Linn said, but they convert more sunlight to electricity than some competitors’ panels. That allows the company to charge a premium, he said. French oil company Total SA owns a majority stake in SunPower. Meanwhile, Tempe, Ariz.-based First Solar makes panels that avoid the cost of silicon by using cadmium telluride thin film. Producing the modules is less expensive than other technologies….”

Did Your Solar Company go Bankrupt?

What happens when panels begin to fail and the solar company has gone out of business?  In most cases, the warranty they offered is worthless.  An example of this occured in San Diego.  According to a KPBS article, “Faulty solar panels that became corroded and posed a possible fire risk were removed from 24 San Diego Unified Schools. According to a district spokesman, solar panels provide about 10 percent of total power for San Diego schools. He said that will not change. The faulty panels, manufactured by Solar Integrated Technologies, were removed this summer.”  The school district was lucky that they leased the system and did not lose their investment. Solar Integrated Technologies filed for bankruptcy.

Protect yourself

There are several ways to protect yourself when going solar.  Choose a company that has a niche market such as better power output, bankability due to long term quality and reliability, or choose a company with great financial backing.  Another way to protect yourself is to lease, not own the system.  If the system fails, you don’t have to make the payments.

Update:  9-27-2012

According to (Reuters) – “Japan’s Sharp Corp may pull its solar panel business out of Europe and the United States and as the cash-strapped company looks for ways to withdraw from money-losing businesses and cut costs, two sources told Reuters.”

Update: 9-30-2012

According to Forbes:

“Struggling amidst a severe downturn of orders for photovoltaic solar panels, China’s behemoth solar panel maker, Suntech Power Holdings (STP) was given a $32 million lifeline on Friday.”

Suntech is buried in debt.

 

 

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