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Competing with your Own Second Hand Products – Massively Oversupplied Solar Equipment Industry faces Unique Problem

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Solar Panels have become massively oversupplied globally with companies in the boom years of 2010 and 2011 installing record amount of solar equipment. It is estimated that the solar equipment installed globally is around 50 GW compared to the 2011 at around 28 GW. The scale of this massive expansion can be understood by comparing with the total solar demand in 2008 of only around 5 GW. The expansion was driven not only by the incumbent solar panel firms but also thousands of new entrants driven by the high return of capital and the lure of a sunrise industry. The problem is particularly acute in China where mal-investment driven by negative real interest rates and government subsidies to industry led to the establishment of thousands of small solar panel firms. Some of the companies which entered like BYD had no synergy at all but built up massive gigawatt scale factories.

Solar equipment companies particularly from Germany and USA benefited from this boom. These companies generated record revenues and profits as an irrational bubble took place in the crystalline solar panel sector. Solar Inverters have also become a crucial component of the overall solar equipment segment accounting for around 10% of the overall costs. The Solar Inverter Market is seeing increasing competition as its large growing size attracts numerous companies. Now with the bubble bursting and companies going bankrupt at the rate of almost one a day, Solar equipment companies are facing a big hangover. The bankrupt companies are selling brand new equipment for pennies to the dollar as they have no buyers. Solar equipment companies are now facing the prospect of competing with their own second hand products discounted by 80-90% . While these firms are trying to sell more sophisticated equipment , it is difficult given that almost every company is bleeding losses. Centrotherm which is one of the biggest solar equipment suppliers slumped by 30% as its banks refused to finance its shipments to almost insolvent customers. After solar panel firms, it is the turn of the solar equipment companies to undergo a consolidation phase .

Centrotherm Photovoltaics ranked second amongst the ” Top 10 PV Equipment Supplier” for another year with revenue of US$825 million. According to the market research firm, Centrotherm was the top supplier of cell and module equipment for the crystalline silicon market in 2010. It achieved this despite the cyclical behavior in the polysilicon business, another key market it is involved in.

Indian Solar Equipment Companies

Solar Water Heater Manufacturers in India

Tata BP Solar – One of the biggest producers of Solar Panels in India, this Tata Group  Company sells Solar Water Heaters under the Vajra, Zing and Hotmax Nova Brands.

Venus - The company sells solar water heaters in 100 and 200 liters  capacity. The price for the lowest SWH starts from Rs 18,800 ( $400) which is not expensive.

Note there are more than 100 manufacturers of Solar Water Heater Manufacturers that have been accredited by MNRE . Note there are no dominant solar water heater companies in India as the market is heavily fragmented.

Solar Lighting Suppliers

SELCO Solar Pvt. Ltd, a social enterprise established in 1995. SELCO employs about 170 employees in Karnataka and Gujarat spread across 25 energy service centers. Selco sells most Solar Products along-with Financing Packages as well.

D.Light Design was started with the socially responsible goal of bringing light afford ably to millions of poor. Its flagship product is S250 which is a dual purpose solar light and mobile charger. It provides 10 times more light than a kerosene lantern.

It also charges the most popular mobile phones on the market. It keeps personal mobile phones fully charged even when AC power is unavailable or inconvenient.

Tata BP Solar - This Tata Company has one of the biggest and oldest solar panel manufacturing operations in the country. Tata BP Solar also manufactures a wide variety of Solar Product which includes different types of Solar Sodium, Solar CFL and Solar LED Lamps.  Tata BP Solar is perhaps the best solar lighting provider in India given the brandname and inhouse manufacturing of solar components. It has a range of Solar Lighting Solutions based on LED and non LED lights.

Hiramut Energies  manufactures and exports Solar Energy Products,  under the brand name of “Sun-Ray” and is  based in Gujarat. They sell Solar Cooker, Solar Home System, Solar Led Lantern, Solar Led Street Light and Solar Water Heating System.

Neutech Solar Systems is mainly focused on solar water heaters but is also sells solar street lighting systems.

Anu Solar started in 1979 and has a manufacturing unit for Solar Water Heating Systems and Solar Photovoltaic Systems. They sell solar lighting systems for streets and residential purposes.

Deepa Solar Lighting Systems has been around for 10 years. The company also sells a wide variety of solar products like solar fans, solar street lights, solar lamps, solar garden lights etc.

Tilak International is a manufacturer of LED signals, solar charge controllers, solar lighting system, solar home lighting system, solar street lighting system.

Aditya Energy Systems established in the year 2000, is a  manufacturers of Solar Photovoltaic lighting systems. It manufactures solar lighting systems of various capacities ranging from few watts to kilowatts catering to domestic and international customer requirements.

Luminous Power Technologies Limited/Schneider Electric has LED  based Solar Lighting Solution. The energy efficient LED based design of this new product with a single light output is at par with 11 watts CFL going between 11 to 12 hrs.

Solar Lamp Manufacturers in India

SELCO Solar Pvt. Ltd, a social enterprise established in 1995. SELCO employsabout 170 employees in Karnataka and Gujarat spread across 25 energy service centers. Selco sells most Solar Products alongwith Financing Packages as well.

D.Light Design was started with the socially responsible goal of bringing light affordably to millions of poor.Its flagship product is S250 which is a dual purpose solar light and mobile charger. It provides 10 times more light than a kerosene lantern.

It also charges the most popular mobile phones on the market. It keeps personal mobile phones fully charged even when AC power is unavailable or inconvenient.

Tata BP Solar - This Tata Company has one of the biggest and oldest solar panel manufacturing operations in the country. Tata BP Solar also manufactures a wide variety of Solar Product which includes different types of Solar Sodium, Solar CFL and Solar LED Lamps.

Note the above are the major solar lamp manufacturers which have had a big impact though Tata BP Solar is more of a commercial solar panel seller. There are a number of small solar lamp manufacturers as well as resellers in India who buy from cheap Chinese vendors and sell it in India.

German Solar Equipment Companies

German Solar Inverter Manufacturers

Germany still holds the leading position in manufacture of solar inverters despite losing the pole position in solar cell and solar panels to China.The high-tech nature of the inverter sector has made it harder for other companies to bridge the competitive advantages of German solar companies

  1. SMA Solar – The Big Daddy of the Solar Inverter Market with a   40% Marketshare of the Global Market.This Germany company has become the most valued solar company in Germany beating out the old stalwarts like Q-Cells  and Solarworld.SMA Solar has managed to maintain its marketshare and grow as fast  with the global solar demand unlike some of its competitors.SMA Solar faces tough times ahead as the growing inverter industry attracts numerous competitors and it remains to be seen whether it can avoid the fate of Q-Cells.
  2. Kaco New Energy – Like SMA,this is also a German company though privately held.It too benefited from the strong growth in German solar market in 2009 and 2010 to become a large players.It is has not grown as fast as SMA but is still a big players
  3. Fronius International – Very similar to Kaco in terms of its growth and being German. Fronius was a top 3 player in 2009 but has seen upstarts  like Power-One take more marketshare.
  4. Schneider Electric – This European Electrical Equipment Giant got into the solar inverter market by buying up Canadian Producer Xantrex.

German Solar Equipment Manufacturers

Germany has the biggest solar equipment industry supplying the tools and machinery needed for production of  solar panels,cells and wafers.While USA has caught up with Germany in supplying the low cost Chinese solar producers,German equipment makers still are heavily  present in the top 10.

The major solar equipment producers are

  1. Centrotherm Photovoltaic AG
  2. Roth and Rau
  3. Meyer Berger
  4. Manz Automation
  5. ALD Vacuum Technologies

Despite the low cost Chinese competition having heavily impacted the solar panel industry in Germany, other sectors like solar inverters,equipment have continued to flourish in Germany. SMA Solar is the biggest solar inverter in the world while Centrotherm is the 2nd biggest solar equipment maker. The German solar market has been the biggest reason for the growth of the global solar industry in the past decade. The progressive and stable German Solar Energy Subsidies have fostered both Renewable Energy and Green Industry and Jobs while a number of countries have messed up.

 

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Sneha Shah

I am Sneha, the Editor-in-chief for the Blog. We would be glad to receive suggestions, inputs & comments on GWI from you guys to keep it going! You can contact me for consultancy/trade inquires by writing an email to greensneha@yahoo.in or call me on +913340606492.

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