Suggestions of an end to the solar renaissance following the recent demise of Solyndra are clearly overblown, if the latest figures to emerge are to be believed.
Over the past five years, global solar PV capacity has grown at an average of 65 percent per year, according to Paula Mints, lead analyst at Navigant Consulting. Even in the last year, while the global economy has suffered its worst recession in decades, the solar sector has continued to grow at an impressive rate of 72 percent, according to the latest REN-21 Renewables Global Status Report.
This consistently high growth rate has occurred alongside rapidly falling costs – and prices – resulting from economies of scale in the manufacturing sector, improvements in manufacturing technologies and increasing solar cell efficiency.
At the same time, Asian, and in particular Chinese, solar manufacturing has grown at a rate unimaginable even a few years ago. Over 38 GW of production capacity was added to the global PV manufacturing industry in the past five years, and Climate Progress projects that, at the end of this year, there will be some 50 GW of module manufacturing capacity in place around the world, with much of this new development forecast in Asian countries. Mints, too, forecasts a sharp peak in industry capacity and shipments over the next four years, from 30 GWp this year to over 50 GWp in 2012, rising steadily to over 80 GWp in 2015. Meanwhile, PV module shipments from China and Taiwan have grown from six percent to 54 percent of global market share in just five years, according to Al Goodrich, senior analyst for solar PV costs at NREL.
These efforts are helping to bring down the price of solar at a lightning pace – to the extent that a recent EPIA study concluded that grid parity would be achieved in a number of markets over the coming 3-5 years, before reaching generally comparable costs in Europe by 2020.
So, even with the overall market apparently buoyant, widespread general policy support for renewables, falling costs per watt and thus an increasingly compelling business case for the technology, does the demise of Solyndra and other recent casualties in the solar sector in fact signal a sea change?
Certainly many solar sector players have taken a profit line beating to judge from their latest financials, and most cite falling prices as a major factor. But, while the rate of change may have been dramatic, is it any more dramatic than the spectacular growth of this industry? Surely those with a competitive edge must have anticipated that prices would inevitably fall further, as they have done year-on-year, and put in place strategies to adapt to a changing market.
Nonetheless, Spectrawatt, a U.S. company, apparently cited competition from Chinese manufacturers in its recent bankruptcy filing, while another failure, Evergreen Solar, also referred to falling prices as a negative factor in its most recently available figures.
It is perhaps interesting to note that one of Spectrawatt’s backers, SOLON Corp, a provider of turnkey solar plants in the U.S., subsequently announced that it plans to phase out module manufacturing operations in its Tucson, Arizona facility by the end of October 2011, adding that it will leverage internal resources and existing external partners in its commercial and utility-scale development strategy. And it is also evident that other companies have been busily cutting costs or adopting a range of other strategies to adapt to the newly competitive low-cost landscape. For instance, First Solar, the only non-Asian manufacturer currently in the global top 10 (as ranked by SolarPlaza), has shifted much of its production to Asia.
Faced with the new competitive price threshold and the rising position of Asian manufacturing, some commentators even suggest that manufacturing in Europe, the U.S. and elsewhere beyond Asia will become unsustainable in the foreseeable future, much as has been seen in the consumer electronics sector.
There are evidently lessons to be learned from recent events by the industry as a whole and it is clear that the dynamics of the sector are indeed changing, but aside from the immediate and obvious, what will the long-term fallout be and what are the implications for research, development and manufacturing? Should the recent shakeout be seen as a referendum on the solar industry, or dismissed as a few isolated cases of failed technology or management – or simple misfortune? It is in this context that we present the latest in our series of Big Questions: What should today's manufacturers do to ensure their survival in the global solar market?
As always we invite readers to present a 300 word response. The best of these are considered for publication in Renewable Energy World magazine, though for that purpose we ask that contributors identify themselves rather than remain anonymous.
http://www.renewableenergyworld.com/rea/blog/post/2011/09/an-end-to-solar-a-new-chapter-or-business-as-usual
Over the past five years, global solar PV capacity has grown at an average of 65 percent per year, according to Paula Mints, lead analyst at Navigant Consulting. Even in the last year, while the global economy has suffered its worst recession in decades, the solar sector has continued to grow at an impressive rate of 72 percent, according to the latest REN-21 Renewables Global Status Report.
This consistently high growth rate has occurred alongside rapidly falling costs – and prices – resulting from economies of scale in the manufacturing sector, improvements in manufacturing technologies and increasing solar cell efficiency.
At the same time, Asian, and in particular Chinese, solar manufacturing has grown at a rate unimaginable even a few years ago. Over 38 GW of production capacity was added to the global PV manufacturing industry in the past five years, and Climate Progress projects that, at the end of this year, there will be some 50 GW of module manufacturing capacity in place around the world, with much of this new development forecast in Asian countries. Mints, too, forecasts a sharp peak in industry capacity and shipments over the next four years, from 30 GWp this year to over 50 GWp in 2012, rising steadily to over 80 GWp in 2015. Meanwhile, PV module shipments from China and Taiwan have grown from six percent to 54 percent of global market share in just five years, according to Al Goodrich, senior analyst for solar PV costs at NREL.
These efforts are helping to bring down the price of solar at a lightning pace – to the extent that a recent EPIA study concluded that grid parity would be achieved in a number of markets over the coming 3-5 years, before reaching generally comparable costs in Europe by 2020.
So, even with the overall market apparently buoyant, widespread general policy support for renewables, falling costs per watt and thus an increasingly compelling business case for the technology, does the demise of Solyndra and other recent casualties in the solar sector in fact signal a sea change?
Certainly many solar sector players have taken a profit line beating to judge from their latest financials, and most cite falling prices as a major factor. But, while the rate of change may have been dramatic, is it any more dramatic than the spectacular growth of this industry? Surely those with a competitive edge must have anticipated that prices would inevitably fall further, as they have done year-on-year, and put in place strategies to adapt to a changing market.
Nonetheless, Spectrawatt, a U.S. company, apparently cited competition from Chinese manufacturers in its recent bankruptcy filing, while another failure, Evergreen Solar, also referred to falling prices as a negative factor in its most recently available figures.
It is perhaps interesting to note that one of Spectrawatt’s backers, SOLON Corp, a provider of turnkey solar plants in the U.S., subsequently announced that it plans to phase out module manufacturing operations in its Tucson, Arizona facility by the end of October 2011, adding that it will leverage internal resources and existing external partners in its commercial and utility-scale development strategy. And it is also evident that other companies have been busily cutting costs or adopting a range of other strategies to adapt to the newly competitive low-cost landscape. For instance, First Solar, the only non-Asian manufacturer currently in the global top 10 (as ranked by SolarPlaza), has shifted much of its production to Asia.
Faced with the new competitive price threshold and the rising position of Asian manufacturing, some commentators even suggest that manufacturing in Europe, the U.S. and elsewhere beyond Asia will become unsustainable in the foreseeable future, much as has been seen in the consumer electronics sector.
There are evidently lessons to be learned from recent events by the industry as a whole and it is clear that the dynamics of the sector are indeed changing, but aside from the immediate and obvious, what will the long-term fallout be and what are the implications for research, development and manufacturing? Should the recent shakeout be seen as a referendum on the solar industry, or dismissed as a few isolated cases of failed technology or management – or simple misfortune? It is in this context that we present the latest in our series of Big Questions: What should today's manufacturers do to ensure their survival in the global solar market?
As always we invite readers to present a 300 word response. The best of these are considered for publication in Renewable Energy World magazine, though for that purpose we ask that contributors identify themselves rather than remain anonymous.
http://www.renewableenergyworld.com/rea/blog/post/2011/09/an-end-to-solar-a-new-chapter-or-business-as-usual
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