BOULDER, USA: The solar energy market has undergone a dramatic transformation over the past two years, driven by a new abundance of polysilicon, the effects of the worldwide financial crisis, and the plunging price of solar modules.
As a result of these factors, the solar industry has shifted from supply-constrained to demand-driven, and a few strong companies have been able to improve their revenues and market share based on a low cost per watt combined with high module efficiency.
According to a new report from Pike Research, this market realignment will set the stage for a new era of solar growth over the next several years, and the cleantech market intelligence firm anticipates that by 2013, in many markets, solar costs will reach the long-elusive goal of grid parity, the cost of electricity from traditional power sources. Between 2010 and 2013, Pike Research forecasts that solar demand will increase at a compound annual growth rate (CAGR) of 24 percent.
“Solar prices are plunging quickly, and lower pricing will fuel a surge in demand in 2010 and beyond,” says senior analyst Dave Cavanaugh. “However, pricing trends and oversupply of solar modules will also place huge pressure on solar suppliers, especially Tier 2 and Tier 3 companies that are not well-equipped to weather the storm. We expect a significant shakeout among solar suppliers in the next two years.”
Cavanaugh adds that 10 key factors will determine success and survival for solar suppliers during this period of industry consolidation:
* Low-cost polysilicon and wafers.
* Low-cost process materials.
* Low-cost processing.
* Module efficiency.
* Economies of scale.
* Market presence in key growth countries.
* Supply chain integration.
* Strong balance sheets and internal financing of growth.
* Module manufacturing in North America and low-cost European Union countries.
* Strong position in niche markets.