Shakeout, consolidation continues in solar industry

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http://www.examiner.com/x-2903-Energy-Examiner~y2009m8d11-Shakeout-consolidation-continues-in-solar-industry

Shakeout, consolidation continues in solar industry

August 11, 4:54 PM - Energy Examiner - John Guerrerio

It is easy to become overwhelmed these days when trying to sift through the major impacts affecting the solar industry currently; but for those solar companies that survive this shakeout period, the future still looks bright.

Many smaller firms in the industry have reached the point where they are paralyzed, unable to adjust their business models to take into account the new landscape that has developed in the industry, and they run the risk of being swallowed up by larger, more successful firms, or more simply, going bankrupt.

As the economy began to slow down in late '08, demand for solar fell off the chart. Demand fell so sharply that a majority of the firms could not cut production fast enough to keep pace. The result was a glut of solar modules, similar to the oil glut (driving prices from $150 bbl to $30 and storage tankers idling offshore waiting for prices to return). Companies that got caught with excess capacity, lower market module prices, and high leveraged debt found themselves in a precarious position.

To get an impression of just how crowded the solar marketplace is currently, experts say that the largest 15 solar manufacturers have the ability to meet ALL current demand in the market; there are now over 100 companies operating in the global solar industry. A majority of these firms, the ones with poor business models, will need to be shaken out. Where will they go?

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