Will Google’s Project Sunroof come to India?
January 5, 2016India finally puts some money in Rooftop Solar – Increases budget by an amazing 730%
January 7, 2016The solar industry has been a brutal one for manufacturing companies in the last 4-5 years, as increased competition has led to a vertical drop in prices. Even as demand elasticity kicked in driving up global demand in the high double digits, supply increased at a faster rate as more and more companies entered the industry lured by the massive potential. China saw hundreds of companies building solar panel factories leading to a global supply glut. The last couple of years have seen many companies go belly up, while even top global players such as Samsung, Siemens, GE, Hyundai etc. have more or less left the solar industry singed by the price competition.
The last couple of months have seen some price increases in the prices of solar wafers from around 80c/wafer to 84-88c/wafer, as global capacity for polycrystalline wafers has remained static even as demand has gone up. This has led to some wafer players like GCL, Green Energy to raise the prices taking advantage. Now solar panel prices have also started to creep up, as demand continues to rise unabated from countries like China, India and USA. While monocrystalline wafers have seen a price decrease as capacities have increased, poly wafer prices have increased. This anomaly is getting corrected as demand for mono panels increased due to favorable price/output dynamic. Now mono wafers are also seeing an increase in prices with major Chinese companies such as Longi, Jinglong group starting to increase the prices of mono wafers.
The global solar industry is finally seeing some stability after vicious price competition, which saw some of the largest companies such as LDK, Suntech go bankrupt. Even Yingli is barely surviving. This has increased the pricing power of existing companies particularly where their marketshare is high. Wafers are dominated by GCL which has a 25% marketshare of the global market. The company is expanding into solar panels reducing the supply of wafers. Even Renesola which used to be a top manufacturer has reduced its focus on wafers, concentrating on making modules and downstream development.
I think the solar industry is seeing stability like the wind industry, which has seen a couple of years of prosperity after competition led to massive losses in 2010-2012 periods. Now Gamesa, Vestas etc. are seeing a return of profitability, as competition from China has lessened. The solar industry will always remain competitive as the entry barriers are relatively low as compared to wind turbines. However, some stability is to be expected given the hyper competition that the industry experienced.
China-based makers, in view of continued tight supply, plan to hike quotes for poly-Si solar wafers to US$0.88-0.92 in January, according to Taiwan-based solar cell makers.Solar wafer supply has been tight mainly due to strong demand in China, where solar firms have been rushing to complete installation projects before feed-in tariff rates are reduced in mid-2016, the sources indicated.