Watch for fallout in equipment companies as solar crisis hits in 2010

NEW TRIPOLI, USA: Solar equipment companies will feel the impact of a looming solar industry crisis in 2010 according to the report: Opportunities in The Solar Market For Crystalline and Thin Film Solar Cells, published by The Information Network.

“In our release on September 3, we forecast that in 2010 the solar industry will exhibit capacity utilization of 25.7 percent, inventory will be stretched to 133 days, average selling prices could drop below $1 per watt in 2010 and $0.50 in 2011, and as many as 50 percent of the more than 200 solar manufacturers, mired in red ink with current selling prices above $2.00 per watt, may not survive,” noted Dr. Robert Castellano, President of The Information Network.

In addition to the failure and consolidation of the solar panel manufacturers, companies supplying equipment to manufacture panels will be severely impacted. Two things will happen. The obvious impact will be the loss of customers of equipment suppliers.

Solar manufacturers, in their exuberance to increase capacity from 17.6GW in 2009 to 24.2GW will initially purchase equipment only to have it sit idle in factories as inventory stretch to 133 days. As these companies close or consolidate, this equipment will then be sold on the secondary market, further exasperating revenue growth for equipment vendors.

Currently, the equipment companies are experiencing a slowdown because even though solar customers want to buy, financing is still tight. Going forward, the largest solar manufacturers will survive as a customer base. Chinese solar manufacturers, who prefer to purchase low-cost equipment from Taiwan, will also survive, as the Chinese government will subsidize their survival by stimulus packages, generous subsidies, free land, and cash for R&D.

Solar panel manufacturers that have reported losses just in the past few weeks include Energy Conversion Devices Inc, JA Solar, LDK Solar Co., ReneSola Ltd, Solar Power Inc., and Yingli Green Energy Holding Co. Ltd.

“Interestingly, five of the six companies are Chinese. They continue to increase inventory, lose money, and affect the entire solar panel industry. Perhaps, it is an attempt to become the worldwide leader in the solar market by eliminating the competition,” added Dr. Castellano.

In 2008, the top 10 equipment manufacturers of the $4 billion market were:

Table: Ranking of Top 10 Equipment ManufacturersSource: The Information Network, USA

Applied Materials and GT Solar are the only two U.S. manufacturers in the top 10.

The giant awakens to solar power while America aleeps -- Evolution Solar grows roots in China

PHOENIX, USA: While the US is still floundering with ad-hoc investments in clean energy, China has developed a straight-forward, no-nonsense approach to reaching 2GW solar capacity by 2011.

It is gaining strong leadership in the solar industry by investing heavily in manufacturing and incentivizing installation. Chinese companies like, Suntech Power Holdings, (NYSE: STP) have succeeded in driving solar panel price reductions over the last six months by selling panels on the US market below the marginal cost. Further, China is circumventing protectionist legislation by constructing assembly plants in the US.

Evolution Solar is setting down roots in China to take advantage of this shift in the center of gravity for the solar industry. In the last century, the United States was the home of most TV manufacturers. By the end of the century, there were none left in America. They were all in Asia!

The same is happening with solar energy and Evolution Solar Corp. (EVSO) has positioned itself to be a resource to the green energy revolution from its new base in China.

“China has made a commitment to solar and placed substantial funds behind that commitment,” stated Robert Kaapke, CEO of Evolution Solar. “Talking about change is very different form actually changing; we want to be part of real change and that is why we are setting down our roots where real change is taking place.”

Nearly all solar providers in America will source parts and components from China in the years ahead. EVSO expects to position itself to compete with producers, such as SunTech and Energy Conversion Devices for a part of this market.

EVSO: Texas launches $500 million solar subsidy

PHOENIX, USA: Evolution Solar Corp. said that the Texas Senate just approved one of the largest subsidy programs for solar power in the United States.

The program mandates a 60 percent increase in alternative energy from sources other than wind over the next five years. The program is likely to result in an additional 200-500 megawatts of solar power in the State of Texas. (There are currently 590 MW of solar power generated nationwide).

"The Texas legislature has made it clear that the State has put out the welcome mat for companies such as Evolution Solar who are committed to expanding solar capacity in the United States," stated Robert Kaapke, CEO of Evolution Solar Corp. “This new initiative will put Texas in the forefront of states that provide solar incentives and help make Texas the leader in solar power as it already is in wind generation.”

Texas is expected to attract solar manufactures with its new incentives as well as installations from companies such as SunTech and Energy Conversion Devices.