NEW YORK -- 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 while companies struggle with a glut of manufacturing capacity and unsold equipment, at least one research firm still sees capacity growing strongly and not slowing down or shrinking. It remains confident that firms will continue to bet big on government stimulus programs, the push for action on climate change and a bounce in demand responding to fallen prices.
In the latest report to join this chorus of solar bulls, analysts with Austin, Texas-based DisplaySearch, a division of the global market research firm NPD Group, predict the worldwide manufacturing capacity for solar cells will expand by 56 percent this year over 2008 levels. 2009 is seen as one of the weakest market years this decade, with even DisplaySearch admitting that demand is down by some 17 percent this year, while others see a decline of up to 30 percent.
"So much cell manufacturing equipment was ordered and installed over the past year that capacity is still expected to grow 56 percent this year," explains report author and manufacturing research vice president Charles Annis in a summary.
In his third fiscal quarter "Quarterly PV Cell Capacity Database & Trends Report," Annis agrees that an "enormous over-supply" is forcing prices down and threatening the viability of numerous cell makers. But despite the current weakened market, the company sees capacity expanding at a compound annual growth rate of about 49 percent a year up to 2013.
Is some overcapacity a mirage?
Other photovoltaic industry researchers aren't so sure.
"During the boom, there were significant capacity increases. There were also, by the way, significant announcements of capacity that may or may not have happened," said Paula Mints, principal PV analyst at Navigant Consulting. "If someone is following announcements and assuming capacity based on that, then their numbers are way too high."... read the rest
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