Power Vents

Solar-panel glut?

According to iSuppli there is a glut in the solar-panel market. It’s so bad that nearly half of all the panels made for 2009 won’t be sold this year, a situation that will persist until 2012. How could prognosticators miss the mark so badly with such an overabundance for years to come? “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 Photovoltaic (PV) cells, to complete solar systems. Despite this, solar panel makers have continued to increase capacity and production, exacerbating the inventory buildup.”

ISuppli says that the total solar-panel production in 2009 will grow by 14.3% to 7.5 GW, up from 6.5 GW 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 instead. After 2012, Wicht said, “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.”

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 number 1 producer of crystalline cells in 2009, iSuppli predicts. Sharp, Yingli, 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. 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. Learn more about the trends affecting the PV market with Wicht’s new report, entitled “Inventory Levels Threaten Suppliers” ( http://www.isuppli.com/default.htm?aspxerrorpath=/Pages/Inventory-Levels-Threaten-Suppliers.aspx).