Solar supply chain burned by disappointing demand, oversupply
Massive oversupply of solar modules, combined with disappointing demand, has caused average inventories throughout the solar supply chain to soar by 64.3%, forcing major oversupply and price erosion, according to iSuppli.
By Suzanne Deffree, Managing Editor, News -- EDN, July 28, 2009
The solar market will suffer the pains of uneven supply and demand through 2009, according to a recent report from iSuppli Corp.
The market research company reported that massive oversupply of solar modules, combined with disappointing demand, has caused average inventories throughout the solar supply chain to soar by 64.3%, forcing major oversupply and price erosion.
Further, iSuppli reported that average days of inventory among solar module and cell makers, polysilicon and wafer suppliers, and vertically integrated companies that provide all these items surged to more than 121 days in Q1, up from 74.2 days during the same period in 2008.
“The worldwide solar industry for the first quarter added the equivalent of one-and-a-half months of excess inventory in just one year,” said Henning Wicht, iSuppli's principal analyst for photovoltaics (PV) research, in a statement. “With new polysilicon capacity coming online this year, the PV industry will suffer further price erosion, at all nodes of the value chain.”
According to iSuppli estimates, the spot price per kilogram for polysilicon will drop to $50 by the end of 2009, down by 72% from $180 per kilogram at the beginning of the year.
Meanwhile, on the demand side, the solar market is facing a "demand sinkhole" that was left after Spain’s PV demand collapsed, iSuppli said. "Despite this, solar-cell makers are still compelled to take deliveries from their polysilicon suppliers due to their long-term contractual obligations," the company said. "On the supply side, polysilicon providers recently invested billions in new facilities, forcing them to produce in order to cover these new fixed costs."
ISuppli noted that some of the most-burned entities in the PV industry have been the fully integrated players, including REC, Yingli, and SolarWorld, which have operations in all three polysilicon, wafer, and cells nodes of the supply chain. Inventory levels for this segment jumped to more than 161 days in Q1, up from 86 days during the first three months of 2008, iSuppli reported.
-
Hopefully, an education campaign, designed to convince people +-32L to +-7L, determined that the Sun is not dodging and cutting around the Earth to please the weatherman, will bring underwriting to more projects.
Steve Nordquist - 2009-17-8 08:46:00 PDT -
And what is the impact on the solar industry from selfish politicians such as Dianne Feinstien who are legislating RESTRICTIONS on construction of new and efficient solar farms?
(do a google search on "feinstein blocks solar power")
With incompetents such as those that are presently "leading" us in congress today, expect NO growth in pollution-free solar power!
It makes me wonder; is the present administration a bunch of 21st century Luddites?
Hope for Change - 2009-4-8 15:05:00 PDT -
Imagine that! Government driven hype for so-called "green technologies" (yeah, right - the only green is in Al Gore & gov't contractors pocket!) meets marketplace reality.
It would be funny if it wasn't so predictable! The solar industry needs to hope for change!
Barry Saetoro - 2009-3-8 17:32:00 PDT -
As the article mentions, and nobody seems to have noticed, due to the fact that most of the americans are caught sleeping in things (and almost everything else) that had to do with the rest of the world.
The rest of the world is awake and doing things... helloooo.
So: Wake up america ! ! .
The Kyoto treaty, which USA didn't acknoledge, respect or sign, did put to work the rest of the world, who took it seriously, specially Europe, towards meeting goals in the CO2 reduction programs and clean energies.
Thats why Germany, Spain and now Italy, Portugal Greece and several more of the EU countries have been actively working in the Solar arena, and are producing tons of megawatts using photovoltaics, in "solar farms" and every corner of their countries.
Last year, in Spain, enacted a series laws that required that new contruction and remodeling projects comply with the use of 30% of clean energy, in the form of solar water heaters, solar powered public lighting, colective "solar farms" in apartment buildings roof's, industrial buildings and parking lots roof's.
The most important side of this was that the laws that the Spanish government enacted, established legal basis, and the working priciples to allow private producers to sell energy to the grid.
In this program, the price of a KW of "clean" energy sold to the grid, was going to be paid to the producers, at almost 5 times the price of the dirty or fossil fuel produced energy, FOR THE NEXT 25 YEARS. The only culprit was that the incentive program was ending in October 2008, and in order to qualify the solar farm had to be operative before the deadline.
That alone, trigered a buying frenzy within the spanish investors, and bankers who went crazy, financing hundreds of projects, in a quest to cover as many square kilometers as posible with Solar panels, in the form of many "Solar Farms" in all sizes, the solar industry in Spain, installers, resellers, and producers; grew at a pace of more than 500% yearly, and it lasted at least for a good 2 years.
This went on in all sorts of lands, but specially lands close to distribution lines, 100 year land leasing contracts were common.
As a consequence a solar panel shortage was created around the whole world, spain was buying all they could, in order to have their solar farms up and running before the deadline, China, Japan Germany and USA production was being sucked mainly by the Spanish market... But, as announced, that program ended in October of 2008, and a lot unaware people were let high and dry; now we must wait for the next wave, the next government that will create a push for clean energy and impulse a better and cleaner planet... will that be the NEW USA under the Obama government?
Lets push for it, lets help to end the thirst and dependency for foreing oil that has the american economy prisioner of third world countries, and fighting VERY expensive, and painful wars for OIL in other parts of the world.
Robert DeLaPlaza - 2009-29-7 17:37:00 PDT -
Great news for consumers!
Yolanda Misoka - 2009-29-7 07:57:00 PDT





















