According to Industrial Info Resources, half of all solar panels manufactured in 2009 will not be sold, resulting in a massive oversupply that will take until at least three years to sort out. Technology value chain research and advisory corporation, iSuppli, reports that a collapse in demand is responsible for the glut of panels.
The reduced demand is
largely the result of changes in Spain's feed-in tariffs. In September last
year, the Spanish government announced a 500-megawatt (MW) cap on solar
installations for 2009, alongside reduced feed-in tariffs. While not as severe
as the 300-MW cap originally proposed, the move has severely curtailed Spain's
need for solar panels. Spain accounted for 50% of worldwide installations in
Reports from iSuppli also
state that the demand drop has led to a massive buildup of inventory throughout
the supply chain, ranging from polysilicon to photovoltaic cells to complete solar
systems. Despite this, solar cell and panel makers have continued to increase
capacity and production of solar cells, exacerbating the situation.
For 2009, total solar panel production will grow 14.3% to 7.5 gigawatts (GW),
up from 6.5 GW in 2008. However, only 3.9 GW worth of installations will take
place this year, meaning that almost one out of every two panels produced in
2009 will not be installed, but stored in inventory.
iSuppli announced, "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. Most companies are doing this in order to maintain their share
in the market. As a result, Suntech Power Holdings Co. Ltd. (Jiangsu, China)
will push Q-Cells aside and become the No. 1 producer of crystalline cells in
2009, we predict. Sharp Corp. (Osaka, Japan), Yingli Green Energy Holding Co. (Baoding,
China) and JA Solar also will defend their top-five 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."
One of the world's largest manufacturers of solar cells, German company Q-Cells
SE (Bitterfeld-Wolfen), recently announced plans to slash 500 jobs from the
company's 2,600-strong workforce in order to deal with depressed prices in the
sector. Q-Cells withdrew the company's 2009 sales forecast in July, claiming
that the price drop and high operating costs were responsible for a 62 million
euro second-quarter operating loss.
Just this month, Chinese solar rivals LDK Solar Co. Ltd. (Xinyu) and JA Solar
Holdings Co. Ltd. limited posted miserable quarterly results due to the price
slump caused by oversupply and reduced demand.
Source: Industrial Info Resources, a leading
provider of global market intelligence specializing in the industrial process,
heavy manufacturing and energy related markets.