Here's a beautiful article I found on E4 Capital LLC, an independent research firm started in 2009 providing ideas to professional investment managers in the public equities of “cleantech” related companies
The solar energy sector, measured by revenues, appears to have hit bottom in calendar Q1. We expect that when full Q2 results are in they will show a strong rebound (better than 30 percent in aggregate) off the Q1 low, although the Q2 level is unlikely to recover all the way to the Q4:08 level.
Only about five of approximately 25 public solar companies that report quarterly results have reported their calendar Q2 results to date (8/11/09). After reviewing their results and looking at the consensus expectations for the remaining 20 names, we concluded that most of the remaining companies will achieve Q2 revenues above the Q1 trough.
Another upswing is getting underway. The peak quarter for solar PV revenues was Q3:08, or about a year ago, ending a remarkable run up driven mainly by extremely generous feed-in tariff subsidies in Germany and Spain.
Volumes of panels installed roughly doubled from 2007 to 2008. The Spanish subsidies were capped after it became apparent that country could not afford the original subsidy program, and Germany made changes to phase down its subsidies more rapidly.
Mainly due to the Spanish program, and aggravated by the global recession and reduced credit availability, prices and volumes fell sharply in Q4 and again in Q1.
The solar companies were slow to react to the downturn, perhaps because so many of the companies in this sector are newly formed and have yet to experience a downturn.
Capital spending continued to grow in Q4 over Q3 and did not begin to drop until Q1. Inventories rose modestly in Q4 and especially steeply in Q1 as companies were slow to curtail production and cut prices. Prices for modules and cells have fallen by on the order of 30 percent to 50 percent, and we believe they are still eroding.
These price cuts have triggered some demand growth as solar energy has become more price competitive in areas with subsidy programs less generous than Spain and Germany (e.g., the US).
The capacity build up in both the principal raw material (polysilicon) and the various conversion steps (wafers, cells, and modules) was such that we do not expect producers to be able to raise prices for awhile.
Two of the hardest hit solar companies will report on 8/12/09. Consensus estimates look for a nearly 100 percent revenue gain Q1 to Q2 at JA Solar to $67 million (still well below the year-ago level of $180 million). There is unusually wide variability in the estimates for JASO though.
Revenue at LDK Solar is expected to fall about 21 percent from Q1:09 to $225 million, however. The company had issued a press release on 7/23 saying it expected revenues of $225-$235 for the Q2 and would be taking an inventory write off of $150 to $170 million. Before the 7/23/09 guidance, the company had estimated revenues of $215 to $225 million. The weak LDK results have thus been well telegraphed.
Showing posts with label JA Solar Holdings. Show all posts
Showing posts with label JA Solar Holdings. Show all posts
Tuesday, August 11, 2009
Half of all solar panels made this year won’t be installed in 2009!
EL SEGUNDO, USA: How bad is the solar panel glut?
* So bad that nearly half of all panels made this year won’t be sold in 2009.
* So bad that the present massive oversupply of panels will persist until 2012.
* So bad that iSuppli Corp. is now reducing its forecast for solar panel production out to the year 2013.
“The solar industry in 2009 has been undermined by collapse in demand due to the decision by Spain—which accounted for 50 percent of worldwide installations in 2008—to change its feed-in-tariff policies,” said Henning Wicht, senior director and principal analyst for photovoltaics at iSuppli.
“This demand drop led to a massive buildup of inventory throughout the supply chain, from the raw material polysilicon, to PV cells, to complete solar systems. Despite this, solar panel makers have continued to increase capacity and production, exacerbating the inventory buildup.”
Total solar panel production in 2009 will grow by 14.3 percent to 7.5 Gigawatts (GW), up from 6.5GW in 2008. However, only 3.9 GW worth of installations will take place this year. That means that almost one out of every two panels produced in 2009 will not be installed but stored in inventory.
“This inventory glut will have a long-term impact on the solar business, with panels set to remain in a state of oversupply until 2012,” Wicht said. “After that year, fast-growing demand for solar installations will be able to absorb global panel production and inventory.
iSuppli’s updated forecast now shows supplier production flattening for the years from 2011 through 2013 compared to the old forecast.”
The figure presents iSuppli’s previous and updated forecasts for solar panel production in terms of GW.
iSuppli: Previous and Current Global Solar Panel Production Forecasts in Gigawatts (Crystalline and Thin Film)
Source: iSuppli Aug. 2009
Still ramping?
Despite the global economic recession, most of the leading producers of solar panels -— such as Suntech, Sharp and JA Solar -— will continue to grow in concert with the overall PV industry, although they have no intention of slowing production of cells and panels.
“Even in the face of the downturn, many panel and cell producers have continued to ramp up their capacities as if a recession had never occurred,” Wicht said. “Most companies are doing this in order to maintain their share in the market.”
As a result, Suntech will push Q-Cells aside and become the No.-1 producer of crystalline cells in 2009, iSuppli predicts. Sharp, Yingli and JA Solar also will defend their Top-5 positions this year by not reducing their solar-cell production increases.
Those suppliers that have reduced or made adjustments to their production of cells and panels as a result of the softening demand have seen their short- and mid-term strategies falter. These suppliers include Q-Cells, SunPower and BP Solar.
Q-Cells, in particular, slowed down cell and panel expansion at its plant in Malaysia and has significantly reduced production targets in 2009. Likewise, SunPower has cut back its plans for expansion, while BP Solar has closed its panel production operations in Malaysia and Spain.
So, while some companies are hiking up production in order to maintain their positions in the market, others are forced to undertake short-term production cuts and delay or even cancel long-term expansion projects.
* So bad that nearly half of all panels made this year won’t be sold in 2009.
* So bad that the present massive oversupply of panels will persist until 2012.
* So bad that iSuppli Corp. is now reducing its forecast for solar panel production out to the year 2013.
“The solar industry in 2009 has been undermined by collapse in demand due to the decision by Spain—which accounted for 50 percent of worldwide installations in 2008—to change its feed-in-tariff policies,” said Henning Wicht, senior director and principal analyst for photovoltaics at iSuppli.
“This demand drop led to a massive buildup of inventory throughout the supply chain, from the raw material polysilicon, to PV cells, to complete solar systems. Despite this, solar panel makers have continued to increase capacity and production, exacerbating the inventory buildup.”
Total solar panel production in 2009 will grow by 14.3 percent to 7.5 Gigawatts (GW), up from 6.5GW in 2008. However, only 3.9 GW worth of installations will take place this year. That means that almost one out of every two panels produced in 2009 will not be installed but stored in inventory.
“This inventory glut will have a long-term impact on the solar business, with panels set to remain in a state of oversupply until 2012,” Wicht said. “After that year, fast-growing demand for solar installations will be able to absorb global panel production and inventory.
iSuppli’s updated forecast now shows supplier production flattening for the years from 2011 through 2013 compared to the old forecast.”
The figure presents iSuppli’s previous and updated forecasts for solar panel production in terms of GW.
iSuppli: Previous and Current Global Solar Panel Production Forecasts in Gigawatts (Crystalline and Thin Film)
Source: iSuppli Aug. 2009Still ramping?
Despite the global economic recession, most of the leading producers of solar panels -— such as Suntech, Sharp and JA Solar -— will continue to grow in concert with the overall PV industry, although they have no intention of slowing production of cells and panels.
“Even in the face of the downturn, many panel and cell producers have continued to ramp up their capacities as if a recession had never occurred,” Wicht said. “Most companies are doing this in order to maintain their share in the market.”
As a result, Suntech will push Q-Cells aside and become the No.-1 producer of crystalline cells in 2009, iSuppli predicts. Sharp, Yingli and JA Solar also will defend their Top-5 positions this year by not reducing their solar-cell production increases.
Those suppliers that have reduced or made adjustments to their production of cells and panels as a result of the softening demand have seen their short- and mid-term strategies falter. These suppliers include Q-Cells, SunPower and BP Solar.
Q-Cells, in particular, slowed down cell and panel expansion at its plant in Malaysia and has significantly reduced production targets in 2009. Likewise, SunPower has cut back its plans for expansion, while BP Solar has closed its panel production operations in Malaysia and Spain.
So, while some companies are hiking up production in order to maintain their positions in the market, others are forced to undertake short-term production cuts and delay or even cancel long-term expansion projects.
Friday, July 31, 2009
US, Chinese, and Taiwanese solar-cell makers gain ground
USA: Japan's suppliers of solar photovoltaic cells and panels, which dominated the industry for many years, slipped in the supplier rankings in 2008, according to a new 2009 report from IC Insights, Solar Energy: Growth Opportunities for the Semiconductor Industry.
The 2008 top 10 solar ranking contains two suppliers based in Japan, three in China, two in Taiwan, two in Germany, and one in the US (Fig. 1).
Source: IC Insights
Sharp Corp. was the No. 1 PV device supplier in 2006 and for several years before that. In 2007, Germany's Q-Cells AG and China's Suntech Power Holdings Co. Ltd. overtook Sharp, according to IC Insights' figures.
In 2008, First Solar Inc., a US-based supplier of thin-film PV panels made with cadmium telluride, blew past both Sharp and Suntech, pushing Sharp down to No. 4 in the 2008 rankings, which are based on the peak-megawatt value of the PV devices produced and sold by each supplier.
The totals include PV cells, and in the thin-film case, PV panels. Cell-based panels are not included to avoid counting cells twice. First Solar's MW TF panel sales increased a stunning 144 percent in 2008, boosting it to the No. 2 position.
For its part, Sharp has stated extremely ambitious plans for expansion of its capacity to manufacture and sell silicon-based TF panels over the near term. If successful, Sharp could quickly make up for lost ground.
Sharp was not the only Japanese supplier whose position declined in the 2008 ranking. Kyocera Corp. slipped from the No. 5 spot in 2007 to No. 6 in 2008. Sanyo, which was No. 7 in the 2007 ranking, did not make IC Insights' top 10 ranking in 2008. Mitsubishi also dropped in the ranking.
Future PV device rankings are expected to show significant changes due to the small increments that separate many of the top players. The top four suppliers all achieved market shares (based on MW sales) between 8 percent and 9.5 percent.
A second tier of suppliers was formed by those ranked No. 5 through No. 10, all having between 4 percent and 5 percent market share, and with several additional suppliers close on their heels.
Changing rank within these tiers is statistically inevitable, and it is entirely possible for a supplier to move quickly from the second tier to the first, as First Solar demonstrated in 2008.
Other than First Solar, the risers in the top 10 list were exclusively suppliers based in China or Taiwan. Although China's Suntech slipped from No. 2 to No. 3 on MW growth below that of the total global industry, JA Solar Holdings Co. Ltd. rose from No. 10 to No. 7 in the ranking based on 109 percent growth in MW sales in 2008.
Yingli Green Energy Holding Co. Ltd. advanced from ninth place to eighth on the strength of 93 percent growth.
In Taiwan, Motech Industries Inc. swapped seats with Kyocera, moving from No. 6 to No. 5 thanks to a 67 percent increase in MW sales. But perhaps more impressive was the performance of Gintech Energy Corp., which equaled First Solar's growth of 144 percent in MW sales in 2008, pulling itself up from No. 12 to No. 8 in the ranking.
Gintech, like JA Solar, makes solar cells only; these two companies follow the business model of top-ranked Q-Cells, which has only recently started to diversify beyond pure-play PV cell manufacturing.
Other suppliers in the top 10 are involved in panel manufacturing, system installations, and other aspects of the solar value chain.
At the bottom of the list is No. 10 Solar World AG, a German company that holds the distinction of being the biggest manufacturer of PV cells in the US, thanks to the recent expansion of its plant in Hillsboro, Oregon.
A US-headquartered cell manufacturer, SunPower Corp., almost made it into the top 10 in 2008, but SunPower manufactures its cells in plants in the Philippines.
The 2008 top 10 solar ranking contains two suppliers based in Japan, three in China, two in Taiwan, two in Germany, and one in the US (Fig. 1).
Source: IC InsightsSharp Corp. was the No. 1 PV device supplier in 2006 and for several years before that. In 2007, Germany's Q-Cells AG and China's Suntech Power Holdings Co. Ltd. overtook Sharp, according to IC Insights' figures.
In 2008, First Solar Inc., a US-based supplier of thin-film PV panels made with cadmium telluride, blew past both Sharp and Suntech, pushing Sharp down to No. 4 in the 2008 rankings, which are based on the peak-megawatt value of the PV devices produced and sold by each supplier.
The totals include PV cells, and in the thin-film case, PV panels. Cell-based panels are not included to avoid counting cells twice. First Solar's MW TF panel sales increased a stunning 144 percent in 2008, boosting it to the No. 2 position.
For its part, Sharp has stated extremely ambitious plans for expansion of its capacity to manufacture and sell silicon-based TF panels over the near term. If successful, Sharp could quickly make up for lost ground.
Sharp was not the only Japanese supplier whose position declined in the 2008 ranking. Kyocera Corp. slipped from the No. 5 spot in 2007 to No. 6 in 2008. Sanyo, which was No. 7 in the 2007 ranking, did not make IC Insights' top 10 ranking in 2008. Mitsubishi also dropped in the ranking.
Future PV device rankings are expected to show significant changes due to the small increments that separate many of the top players. The top four suppliers all achieved market shares (based on MW sales) between 8 percent and 9.5 percent.
A second tier of suppliers was formed by those ranked No. 5 through No. 10, all having between 4 percent and 5 percent market share, and with several additional suppliers close on their heels.
Changing rank within these tiers is statistically inevitable, and it is entirely possible for a supplier to move quickly from the second tier to the first, as First Solar demonstrated in 2008.
Other than First Solar, the risers in the top 10 list were exclusively suppliers based in China or Taiwan. Although China's Suntech slipped from No. 2 to No. 3 on MW growth below that of the total global industry, JA Solar Holdings Co. Ltd. rose from No. 10 to No. 7 in the ranking based on 109 percent growth in MW sales in 2008.
Yingli Green Energy Holding Co. Ltd. advanced from ninth place to eighth on the strength of 93 percent growth.
In Taiwan, Motech Industries Inc. swapped seats with Kyocera, moving from No. 6 to No. 5 thanks to a 67 percent increase in MW sales. But perhaps more impressive was the performance of Gintech Energy Corp., which equaled First Solar's growth of 144 percent in MW sales in 2008, pulling itself up from No. 12 to No. 8 in the ranking.
Gintech, like JA Solar, makes solar cells only; these two companies follow the business model of top-ranked Q-Cells, which has only recently started to diversify beyond pure-play PV cell manufacturing.
Other suppliers in the top 10 are involved in panel manufacturing, system installations, and other aspects of the solar value chain.
At the bottom of the list is No. 10 Solar World AG, a German company that holds the distinction of being the biggest manufacturer of PV cells in the US, thanks to the recent expansion of its plant in Hillsboro, Oregon.
A US-headquartered cell manufacturer, SunPower Corp., almost made it into the top 10 in 2008, but SunPower manufactures its cells in plants in the Philippines.
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