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.

ReneSola, Wuzhong Government sign LoI for 150MW on-grid solar power project

JIASHAN, CHINA: ReneSola Ltd, a leading vertically integrated Chinese manufacturer of solar products, announced it has been granted the exclusive right in a letter of intent with the Taiyangshan Development Zone in Wuzhong city, Ningxia Hui Autonomous Region, to develop a 150 megawatt on-grid solar power project with a budgeted total investment of RMB 4.8 billion (approximately $706 million).

The project, which is subject to a feasibility study and government permits and approvals, has a four-year, four-phase construction period that is expected to begin in 2010.

"We are pleased to announce our new 150MW on-grid solar project in Wuzhong, which adds to our track record of partnering with local governments to develop sustainable solar projects," said Xianshou Li, ReneSola's chief executive officer.

"Our vertically integrated solar manufacturing capabilities continue to position us to capture opportunities presented by the government's increased focus on establishing alternative energy sources."

Li added: "We are excited by China's transformation from a manufacturing hub of solar products into an important and increasingly significant end-user market. The emergence of downstream projects in the domestic market represents a significant opportunity for ReneSola to create new revenue streams and expand local market share.

"The 150MW on-grid solar project in Wuzhong bolsters our downstream project portfolio as we strengthen our position as one of the leading vertically integrated solar companies in China. The Ningxia Hui Autonomous Region is one of the sunniest regions in China, and this project is strategically located to fully take advantage of the abundance of natural sunlight in the local area."

ReneSola signs Loi to develop 500 MW of solar power generation

JIASHAN, CHINA: ReneSola has entered into a letter of intent with the Yancheng city government, Jiangsu province, to develop a 500 megawatt on-grid solar power generation project.

In addition, the Company has been granted the exclusive right in a letter of intent with the Panzhihua east district government, Sichuan province, to develop a 5 MW rooftop project. Both projects are subject to feasibility studies and approvals by various government authorities.

"We are delighted to announce the addition of these new projects to our downstream solar project portfolio," said Xianshou Li, ReneSola's chief executive officer.

"The 500 MW solar project in neighboring Jiangsu province is set to become one of the largest of its kind so far in China. A project of this magnitude will showcase ReneSola's expertise in utility-scale solar applications and help raise our profile in the downstream space as we position ourselves to benefit from the government's enhanced focus on renewable energy."

According to the letter of intent entered into with the Yancheng city government, ReneSola will develop a 500 MW on-grid power generation project in Jiangsu province, China. The project will consist of mainly ground-mounted system applications and 10 MW of rooftop installations to be built over a six-year period.

According to the letter of intent entered into with the Panzhihua east district government, ReneSola will develop a rooftop project of no less than 600,000 square meters for new or existing government buildings, with installed capacity planned to reach 5 MW.

Source: SolarBuzz