75% of Solar Panel Companies to Disappear in 5 years as a Common Industry Technology Roadmap appears

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Solarbuzz which is one of the solar industry’s leading research agencies has come out with some predictions on the Solar Industry for the next 5 years. Note forecasts by analysts and agencies are notoriously wrong in the context of the solar industry which has been seen time and again. In fact, a lot of the research is based on shallow research and inadequate understanding of the fast changing solar market as can been seen in the report by Crisil (S&P subsidiary). However some of the predictions by NPD Solarbuzz are interesting and provide food for thought.

a) A new technology roadmap will appear by 2013 like the semiconductor industry which will help weed out weaker players. Around 75% of the current crystalline silicon solar companies will disappear and only 13 thin film solar companies will exist.

b) Solar Equipment companies will see more M&A, as acquiring solar equipment company makes sense from the technology point of view unlike the solar panel manufacturing sector, where commoditizing and oversupply makes little sense.

c) High efficiency Solar Cells will account for 75% of the market in 2015 from around 18% now.

d) A number of crystalline silicon and thin film solar technologies will disappear as the stronger solar players coalesce around mainstream c-Si technologies.

e) High efficiency solar panels will help in industry consolidation as it makes the gigawatts of low efficiency equipment obsolete.

Though it is difficult to say which of the above predictions will come true, one thing that is certain is that the industry will continue to shift to high efficiency in order to lower costs and a lot of the solar panel technologies will disappear as c-Si technology has become the de facto leader in cost.

The First Wave of Thin Film Bankruptcies

Applied Materials is perhaps the biggest loser with the management all but giving up on its Thin Film Equipment Division (SunFab). This turnkey technology has failed to keep up with the decline in costs and improvment in Technology. With most of its customers already writing off their investments, AMAT too has reduced support to SunFab
Oerlikon Solar like AMAT had bet its future on supplying a-Si Thin Film Equipment to customers and was giving Applied Materials tough competition. However the falling poly prices have resulted in sharp order cuts for Oerlikon and the survival of its thin film division too is in doubt.
Q-Cells has written off its investments in 2 of its thin film divisions -Calyxo (CdTe) and Sunfilm (aSi). Only Solibro (CIGS) division has survived the major restructuring of Q-Cells which saw a multi-billion dollar loss in 2009 and resignation of its CEO.
Suntech a-Si Division which was set up in Shanghai with a SunFab equipment from Applied Materials has been written off according to the management and will be retooled to manufacture high efficiency c-Si cells.
Moser Baer was one of the first customers of Applied Materials SunFab Line. However the company had problems in ramping up its line. Recent results do not inspire any confidence in the success of its thin film venture.
Signet Solar was one of the best known a-Si startups with a strong management team. However like other SunFab customers it is too facing a bleak future with recent news of cancellation of its expansion plans.
Sanyo had set up a JV with Nippon Oil with grandiose plans to manufacture a-Si panels with a planned 1 GW capacity by2015. This JV Sanyo Eneos too is deferring its expansion plans with the cost/efficiency metrics not being competitive against c-Si modules.
Masdar PV the Abu Dhabi backed Renewable Energy company is facing problems with it its thin film business, recently firing top executives at its German thin film division.