Oldest US Solar Panel Producer Uni-Solar Ovonic goes Belly up

16 Feb, 2012
China,Solar Energy,Solar Panels

While US Solar Installers are making Hay while the Chinese Solar Panel Companies flood the world with super cheap solar modules,Western solar manufacturers are being killed at an astounding rate.The second biggest thin film solar panel company in the US United Solar Ovonic has gone belly up.The company was fighting a losing batter as the more efficient crystalline solar panel prices went below its production cost.The company had tried to fight in a the niche of BIPV solar panel market but could not survive. After First Solar,Energy Conversion Devices seemed the mostly likely viable company in Thin Film Technology.After a few quarters of profits in 2008,the company went into the red as its flexible a-Si modules failed to cut costs as fast as others.It has been shutting factories in the US and shifting to low cost locations.

Energy Conversion Devices also cuts down US production and increases Manufacturing in Mexico

All US Solar Companies have majority of their  production being manufactured outside of the USA except for Energy Conversion Devices (ENER).Now ENER is also joining the rest of its peers as it cuts down jobs in the USA and increases production in Mexico.This should have come much earlier as ENER continues to lose loads of money due to its high cost operations.Note the other major companies like First Solar and Sunpower have almost 90-100% of their solar modules being made in Asia while Evergreen Solar has also recently outsourced production to China

The company has sold off its battery operations and has filed for Chapter 11 bankrutpcy.Other smaller thin film companies like Nanosolar,Miasole too look on their way out.Stion and Heliovolts have found foreign partners to survive which means that First Solar might be the only thin film solar company in the US to survive.The Chinese solar industry continues to bankrupt non-Chinese solar companies across the world.

The Chinese Dominance of the Solar Industry in the last 2 years have seen numerous Western companies go bust . This has accelerated sharply in 2011 with companies like Evergreen Solar,Spectrawatt, Solar Millenium, Solon, Photowatt etc. either gone for good or in various stages of bankruptcy. Other US Solar Panel Manufacturers like First Solar, Sunpower have fired thousands and some are continuing with large losses. European Solar Companies are the worst off given their high cost structure and lack of differentiation. Solland Solar recently killed its solar module line while some like Schott have killed their solar wafer lines.

Solar Jobs have been cut in the tens of thousands this year by a number of European Solar Companies including marquee names such as REC, Q-Cells, Solarworld ,SMA Solar besides many of the smaller names. Some of the solar companies like Solon have completely shut down. 5000 solar companies have downed shutters in 2011 according to German association BSW. This is despite global solar demand in 2011 increasing by around 30-40% compared to 2010. The reason is that massive overcapacity has been created in China and other parts of Asia. Backed by cheap loans and massive subsidies, around 50 GW of solar panel capacity has been created . This has led to a crashing of solar panel prices by 60% which has decimated the higher cost companies in Europe.

Thin Film Solar

Solar Thin Film Technology has been growing rapidly despite falling costs of the mainstream Photovoltaic Crystalline Silicon Technology.While the current solar supply glut has resulted in some of the thin film solar film companies going out of business,big thin  film suppliers continue with their growth plan.Solar Thin Film Technology is supposed to be  the 2nd Generation successor to the mainstream Crystalline Silicon (c-Si) Technology which accounts for around 85% of world production.While a number of Weaker Hands in Thin Film have downed shutters,Thin Film Producers continue to grow and expand.The massive growth potential of Solar Energy makes it possible for both of these PV technologies to flourish.Thin Film Technology unlike c-Si has a number of variants.Amorphous Silicon (a-Si),Copper Indium Gallium Sulphide (CIGs) and Cadmium Tellurium (Cd-Te) are the 3 main types of Thin Film Technology.There are a number of manufacturers of all of these 3 types of Technology.CIGs Technology is said to have the most potential in improving efficiency and competing with c-Si,however Cd-Te is currently the top dog as the world’s biggest solar producer First Solar currently uses this technology.a-Si Technology is not that hot with low efficiencies however Oerlikon and Sharp are pushing ahead with developing this technology.

4 Ways Chinese Solar Panel Companies are already Short Circuiting Future US Import Duties

14 Feb, 2012
China,Solar Panels

The US Import Sanctions on Chinese Solar Panel imports will become a non-event soon as Chinese solar panel producers are easily short circuiting the sanctions. They are using a number of  strategies to protect themselves from the upcoming duties and anti-dumping measures. This shows that globalization makes the use of specific duties on a nation quite useless and only benefits the lawyers . The reason is that private companies are much more faster and nimble compared to the slow moving bureaucrats .

The Chinese solar panel producers are using different methods to short circuit the upcoming sanctions

a) Buy Solar Cells from Taiwanese Solar cell makers which have huge capacities without the competitiveness of the Chinese solar panel makers.Note Taiwan does not have strong low cost integrated solar players like China. They also lack the heft of the South Korean chaebols like Samsung and LG. So they can be easily exploited by the Big Chinese Solar Companies.

b) They will set up factories in low cost locations in places like East Europe, Malaysia, Mexico .These companies will  export solar cells and fabricate solar panels in these locations. Note most of the value addition is done till the solar cell stage with solar module being mostly an assembly exercise. Setting up a 100 MW solar panel plant is also quite cheap these days

 China-based makers concerned, due to worries about possible punitive measures imposed by DOC, are planning to set up PV module factories in Southeast Asia, Mexico and East Europe to cope with the potential negative impact, according to industry sources in Taiwan.The PV module factories to be established will each have an annual production capacity of 100-300MWp, with solar cells to be imported from China, the sources indicted. The selection of Southeast Asia, Mexico and East Europe is based on consideration of total production cost and cost of shipping PV modules to the US market, the sources pointed out.

c) They will set up solar factories in the US itself where they will import cells and make the modules.

d) The Chinese have already built massive inventory stocks in the US of Chinese solar panels .There was a massive surge of solar panel imports in December which indicates that this strategy has already been employed.

The US Department of Commerce has found a large surge in Chinese solar imports, which could trigger 90-day retroactivity if it finds duties are warranted.In the latest developments in the spat between US and Chinese solar manufacturers over potential dumping of Chinese solar products into the US market, the US Department of Commerce has taken action against the surge of Chinese solar cell and panel imports ahead of Commerce’s first preliminary determination on duties, now scheduled for 2 March, 2012.

Note Solarworld which has led the petition against the cheap Chinese solar panel imports has already filed an extension to include Chinese made solar cells as well. However, does not look like that will help also as the making of solar cells can also be outsourced cheaply to Taiwan, Malaysia and other places

 

 

Why Bosch should exit the Solar Panel Market ,Stop Throwing Good Money after the Bad

13 Feb, 2012
Solar Energy,Solar Panels

Bosch which is one of the biggest automotive component suppliers on the planet has made one mistake after the other in the solar panel market. Despite entering the solar panel market 4-5 years ago with billion dollar acquisitions it does not figure even in the top 20 global solar panel manufacturers. The massive solar panel price crash in 2011 has made most German solar companies either bankrupt or on the borderline. Bosch Solar Panels has been no exception as German solar panel costs are too high for the current prices. It had decided to expand in Malaysia to compete with the super low cost Chinese solar modules following in the footsteps of companies like Q-Cells and First Solar.

However it has now thankfully put its plan on hold of spending another 520 million euros on solar energy. The company has already wrote down $1 billion in solar after the valuations of Ersol and Aleo have crashed from the time it bought it. Note most Western solar companies are going bankrupt as they can’t compete with the 80c/watt solar panel prices. Stalwarts Q-Cells are defaulting on the debt payments while according to Total CEO, Sunpower would have been bankrupt if they had not bought it. Even the biggest US Solar Panel Company First Solar has been ravaged by the price war. Bosch has bravely said that it would continue to remain in the solar panel market while it makes more sense for them now to make an exit and concentrate on their core competencies. It can realistically never hope to get into the top 20 solar panel suppliers and stop spending good money after the bad.

Bosch Acquisitions in Solar Energy

Bosch started out into the Solar Energy field by making a very expensive acquisition of a Tier 2 German solar company Ersol in 2008 for Euro 1.1 billion.Bosch paid a premium of 60% for buying out Ersol which was a manufacturer of wafers,cells and modules.The company paid a very price to buy Ersol which was a jack of all trades kind of solar company without any substantial competitive advantages.Bosch had set a target of Euro 750 million from renewable energy (don’t know whether they met it ).Bosch made a bad decision because at the current stock prices  it can buy almost the entire German solar panel manufacturing sector for Euro 1.1 billion.Its doubtful that Ersol would have survived the current solar panel downturn and was extremely lucky to get bought by Bosch for that price.The company also bought two other small German solar companies at expensive valuations Aleo Solar and Johanaa Solar (a thin film solar panel producer).It could have similarly bought these companies or even better companies at much cheaper prices.

Bosch  now moves to Malaysia as its European Factors are unviable (Billions go to Waste)

After sinking more than a billion euros into buying very expensive manufacturing facilities in Germany,Bosch has now decided to move to Malaysia.With European solar factories getting shutdown due to low cost competition from China,it was only a matter of time.Now Bosch has decided to invest Rmb 2.2 billion to set up new fully integrated photovoltaic manufacturing plant in Penang

Bosch Solar Panels Review

Bosch makes Solar Panels not only of the mainstream crystalline silicon type but also sells thin film solar panels which it acquired from Johanaa.Bosch Solar Panels are of good quality being made in German factories where quality control is good.However the cost and price factor is a problem as Bosch Solar Panels are much more expensive than the cheap solar panels being made by Chinese low cost panel manufacturers.This is the reason that Bosch is being forced to move to Malaysia as European solar panel manufacturing is facing huge headwinds.

Bosch says still committed to Penang solar panel plant

In order to achieve economies of scale in production costs, Bosch is currently evaluating the most technologically advantageous direction for the plant.

“We will therefore be adjusting the commencement of the construction to a later time in 2012,” Robert Bosch (South East Asia) Pte Ltd president and managing director Martin Hayes said.

Hayes, who is also managing director of Robert Bosch Sdn Bhd, also stressed that the Stuttgart-based company would push ahead with the internationalisation of solar cells despite the current difficult market conditions.

Bosch’s decision to hold off on the fully-integrated manufacturing plant, which would have served its Asean operations, comes after the firm missed profitability targets last year as special charges ate into earnings.

Franz Fehrenbach, chief executive of the Stuttgart-based company, said last month Bosch booked an earnings charge of around €1 billion (RM3.94 billion) in 2011 due to upfront costs for its push into the fields of electric mobility and renewable energy, as well as currency fluctuations.

Western Solar Bankruptcies

The Chinese Dominance of the Solar Industry in the last 2 years have seen numerous Western companies go bust . This has accelerated sharply in 2011 with companies like Evergreen Solar,Spectrawatt, Solar Millenium, Solon, Photowatt etc. either gone for good or in various stages of bankruptcy. Other US Solar Panel Manufacturers like First Solar, Sunpower have fired thousands and some are continuing with large losses. European Solar Companies are the worst off given their high cost structure and lack of differentiation. Solland Solar recently killed its solar module line while some like Schott have killed their solar wafer lines.

Now a new wave of bankruptcies are on the way with Q-Cells likely facing a credit event as it needs to roll over convertibles which come due in February. Note Q-Cells has fallen a long way from being the biggest solar cell company in 2008. Miasole and Nanosolar were Private Equity backed CIGs darlings that were supposed to become the biggest thing following Firsst Solar . Now Nanosolar faceds executive exits while Miasole has fired large number of its workforce failing to find a big parent to support it. Note the smaller companies like Ascent Solar have found backers in Asia . Solar Technologies are seeing Darwin Survival of the Fittest with crystalline silicon solar panel technology beating out thin film solar and solar thermal technologies

Panasonic follows Solarworld in shutting down a Solar Factory in California

8 Feb, 2012
Solar Energy,Solar Panels

California which has the largest number of solar installations in the USA and is the capital of solar energy in North America is seeing a rapid exit of solar panel manufacturers. First it was Solarworld which closed a solar module manufacturing facility. Now Sanyo Solar Panels will stopped being made in the state as well as Panasonic consolidates  manufacturing in Asia. Note cheap Chinese solar panels have made western manufacturers exit the solar industry and their have been a number of media grabbing bankruptcies as well. Western solar companies as well as Japanese solar panel makers have been shutting down in droves now .

Sanyo Solar is one the biggest Japanese solar companies along with Sharp,Kyocera and Mitsubishi.After Panasonic bought Sanyo,the emphasis on the renewable energy green division has been increased by Panasonic..Sanyo had been already been metamorphizing into a Green company from an Electronics company before Panasonic bought it for a very cheap price.Sanyo had never found much success in the cut-throat Electronics Sector with Operating Margins very near to break-even.However under Panasonic it could become a potential leader in the extremely fast growing Green Sectors.Panasonic has completely changed its strategy to become a major Green Player targeting a Major Percentage of Sales in the future to come  from Green Products.Panasonic which is the world’s biggest Plasma TV producer is going to spend $1 Billion on Green Building investments.Panasonic will combine its Green Strengths with Sanyo’s to sell a complete Eco-Friendly Home complete with Solar Power,LED Lighting and Energy Storage and Efficiency capabilities.In Solar where Panasonic  is the No. 3 player in Japan behind Sharp and Kyocera ,it is speeding up the expansion of solar capacity.It will spend more than $500 million aiming to triple its energy solutions business in Europe to 800 Million Euros by 2016.

Sanyo which was bought over by Panasonic a couple of years ago had started the facility back in 2003 when most of the big Chinese solar companies did not exist. Now 140 Solar Jobs will be lost as Panasonic like others shift solar manufacturing to Asia. Sumco another Japanese company has totally exited the solar business due to the freefall in solar material prices with solar wafer prices down by 70% in one year.

Japanese Companies which were the leading solar companies in the early part of the century have steadily lost the top global rankings to Chinese companies. Now many of the topJapanese Solar Energy Companies are retreating from markets and manufacturing completely . Sharp which was the largest solar company in 2009 and 2010 has radically restructured its strategy but is still losing marketshare. Panasonic the second biggest solar company has closed down its Japanese factory. Other Japanese solar companies like Mitsubishi, Kyocera are also being forced to rethink solar panel manufacturing.

Note most of the higher cost producers in the solar industry are effectively bankrupt and are only being supported by government or big parents. Many Western companies have already closed or are on the verge of closing. Some of the bankrupt companies are not finding buyers of their equipment even at 10c/dollar. Massive overcapacity remains in the solar industry particularly in China which is not being taken out fast enough which will probably lead to another bad year for solar stocks in 2012.

Sanyo Factory Closure

Sanyo Electric Co. will cut about 140 jobs and close an aging solar wafer factory in Carson, California, as it prepares to start up operations at a plant in Malaysia.

The plant, which makes the equivalent of 30 megawatts of silicon ingots and wafers for solar cells a year, will stop production next month and close in October, Masatsugu Uemura, a spokesman for Panasonic Energy Co., said by phone from Osaka. Sanyo is a unit of Panasonic Corp. (6752)

Guess Why Honda is using Thin Film Solar Panels to power Dealerships and Auto Plants

7 Feb, 2012
Solar Energy,Solar Panels

It is not widely known that ,Honda is a manufacturers of CIGs thin film solar panels alongwith the likes of TSMC, Solar Frontier and others. Honda has been in the solar panel manufacturing business of the last 3-4 years though its capacity remains small and its panels not very efficient. Like many conglomerates , Honda too entered the solar industry during the boom times and now would be finding the going hard . Note a number of Japanese solar companies have existed the business like Sumco and others. However Honda which remains a very marginal player in the global solar business is not going away . Instead it is using its own solar panels to power its own dealerships and auto plants.

Honda,the Japanese auto giant has also joined the Solar Energy Race by selling Thin Film Modules based on CIGs technology.Japan’s conglomerates like Sharp,Kyocera,Mitsubishi and Panasonic already have big solar manufacturing operations with Sharp being the largest Solar Company in the World.Honda which has a small presence in the Solar Energy through its subsidiary Honda Soltec is expanding its lines of modules for the domestic market.NoteSouth Korean Chaebols like Hanwha,Samsung,Hyundai and Taiwanese biggies like TSMCand AUO have a put in huge investments into solar manufacturing recently

Honda’s modules have an efficiency of 11.6% which seems lower than those claimed by the TSMC-Stion,Miasole and Q-Cells.These companies are claiming 13% efficiency though none of these companies have large scale commercial production as of now.Q-Cells  and Miasole are at the head of the CIGs pack with companies like Nanosolar,Solyndra,Solar Frontier and TSMC-Stion closely following.CIGs technology is said to be the best thin film technology better than the Cd-Te technology used by First Solar and a-Si technology used by Sharp and the now bankrupt Applied Materials thin film division.

The reason it is using its own CIGs solar panels is most probably the fact that nobody else is buying its solar panels and rather than waste them it is powering its plants with them . Having a small under 100 mw plant these days is totally unviable and that too for a thin film technology .First Solar  which is the biggest thin film player in the world is finding the going tough ,so Honda Soitec would be finding the current situation super tough.

Honda Motor Co., Ltd. announced the installation of a 9 kilowatt-capacity solar power generation system at the Adachi Odai location of the Honda Cars Tokyo Chuo dealer network. The installation kicks off a project to install Honda Soltec(1) solar power generation systems with a total capacity of 1 megawatt at Honda automobile dealership locations in Japan by March 31, 2014.

Striving to realize a low carbon society, Honda has been installing solar power generation systems at Honda operations in Japan. The combined capacity of solar power generation systems installed to date has reached 3.3 megawatts, the largest in Japan among all automakers operating. Honda has been already installing solar power generation systems at some Honda automobile dealership locations; however, in order to further extend the effort to reduce CO2 emissions in the area of sales, Honda made a decision to pursue this large-scale installation of solar power generation systems that includes the installation of a display monitor which shows current power generating situation of solar panels to customers who visit the dealership location. Furthermore, Honda is planning to install a 2.6-megawatt Honda Soltec solar power generation system to the new Yorii Plant, which is scheduled to become operational in 2013. This will be the largest solar power generation system installed at an automobile production plant in Japan.

Appendix

Manufacturers of Solar Thin Film Panels

1) First Solar – First Solar is the only Solar Thin Film Manufacturer in the world and a benchmark for other thin film companies thinking of making it big.The company was promoted by Wal-Mart promoters and has seen remarkable growth in the last few.This US based company uses Cadmium Tellurium (Cd-Te) Technology and  is the lowest cost panel producer in the world today if you don’t include any penalty for low efficiency.Even if you penalize the Cd-Te Technology for its lower efficiency vis-a-vis the higher efficiency crystalline technology,First Solar is clearly the leader with a core cost of 74c/watt.The company has a roadmap of  reducing the cost to 52c/watt by 2014 and given its track record it seems quite achievable.There is little doubt about First Solar’s ability to survive and flourish due to its massive first mover advantage.

2) Sharp – Sharp,the Japanese Zaibatsu known more for its Electronics Products is also the world’s No 1 Company in terms Solar Module Revenues.Despite its leadership in c-Si Technology,it has shifted focus to a-Si thin film due to higher costs.Sharp has started shipping a-Si modules from its 1 GW capacity plant in Sakai.With its established distribution strengths and technological abilities in LCD Technology,Sharp is one company that can survive the c-Si onslaught.With most of the a-Si thin film competitors bankrupt or in a moribund state,Sharp can capitalize to completely capture this space.However the cost structure of Sharp is not clearly known right now to make a clear call on how this will turn out.Also a 10% efficiency while decent for a-Si technology fall far short of the 13% claims by CIGS start-ups like Miasole.

3) Solar Frontier - Solar Frontier is a subsidiary of Showa Shell Sekiyu and is listed on the Japanese Stock Exchange.The Company has big plans for the Solar Energy Market planning to increase its capacity by more than 10 times in 2011 to around 1 Gw in total.All its 3 plants are located in Miyazaki in Japan and uses previous plasma plant of Hitachi.Solar Frontier claims 11.5% efficiency for its CIS modules which are expected to go upto 14% by 2014.The Company is spending around $1 Billion in Capex for building the 1 GW capacity implying roughly $1 capex/watt which is not exactly cheap though not very expensive either.

China Smartly Lower Solar Subsidy by 30% to Rmb 7 per Watt in 2012 to Lower Burden

6 Feb, 2012
China,Solar Energy,Solar Panels

China which is home to the biggest solar industry in the world and most of the top solar panel manufacturers has decided to lower subsidy in 2012. Note China did not pass a Feed in Tariff Law for a long time as prices of solar energy remained high. But after a massive crash in solar prices and energy in 2011 it passed a FIT law in late 2011 to take advantage. This resulted in a big jump resulting in China becoming one of the top 5 markets in 2011 . Now China is set to become one of the top 3 markets in 2012 if not the biggest . This is due to the fact that other European solar panel markets are rapidly reducing subsidies and China needs to support its solar companies many of which are effectively insolvent like LDK.

Some big German companies like Solon and Solar Millennium have already announced bankruptcy.Note Chinese companies too would have shut down but the state owned Chinese banks are keeping them alive with loans at ridiculous interest rates.LDK  which is buying Sunways is almost insolvent as well with its convertibles trading at less than 50c on the dollar in Singapore.It has more than $3 billion in debt compared to its market cap of around $600 million.It faces massive losses in the coming qtrs and can’t serve the interest payments much less expand.The strong support of the Chinese government for its green companies is keeping them alive.Chinese solar panels have become super cheap due to companies selling at below cost and massive scale.Note all the cheap solar panel brands in the world are Chinese with the exception of First Solar and some Asians.

LDK has managed to spend 22 million Euros despite burning hundred of millions of dollars in cash because it has got the Chinese government trillions backing it.So while Western companies burn and crash,the big crony Chinese companies can expand and acquire.

China has decided to lower its FIT by a big 30% cut to Rmb 7 /watt to lower the subsidy outgo. With the panel prices having fallen so much, it is still profitable to build solar systems at these prices without giving any outsized returns to solar project developers. Unlike many countries where FIT has led to massive unsustainable booms like Spain,Czech, China is proactively cutting any chances of a boom at the bud. Note most of the growth in the Chinese solar market will only help the Chinese solar companies because of their low costs, home advantage and implicit support of the utiltiies.

China’s solar market growth has hit the rocket phase in late 2011 with the announcement of the long awaited national Feed in Tariff . Many of the Chinese utilities have set up large solar farms utilizing the cheap solar panels produced by Chinese solar panel companies. Note Chinese solar companies are the dominant players in the world having almost killed the western solar industry in the last couple of years. With cheap costs and massive government support, China is almost ruling the solar industry globally . In the domestic Chinese market they have even a bigger advantage given the local home conditions and preference of domestic companies . Note China become home to the biggest wind turbine companies when China enacted the domestic content requirements in 2006. With the solar industry , the Chinese government does not need this law as its companies already possess massive advantages over the foreign competition.

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