World Solar Industry Appears Headed for a Shakeout

Despite a well-publicized oversupply of products and excess manufacturing capacity for solar photovoltaic equipment and components, some solar power industry watchers are still predicting further robust growth in production capacity. But financial analysts fear numerous makers may fail over the next few years.
Record demand for solar equipment and a shortage of polysilicon, the key ingredient for PV panels, led companies worldwide to rapidly expand their facilities just before the global financial crisis cratered demand for new clean energy installations. As a result, prices for polysilicon, PV and thin-film solar panels have plummeted, and many experts say the industry is now in the midst of an upheaval as weaker firms close or sell off major chunks of their operations to stay alive.

But given the solar industry’s relative youth and its history of wild up-and-down swings and adjustments, Navigant analyst Mints warns against following too closely predictions on the future size and shape of the solar industry in the years to come. The feared “shakeout” in the industry could simply be a temporary return to less certain times, she notes.

“It’s an industry that was essentially unprofitable up to 2004 and is used to struggling,” said Mints. “So we’re pretty much back to that right now and learning how to struggle again.”

New York Times