THE SUN BUSINESS IN COMING MONTHS

Solar’s Big Question: What Happens in the Second Half?
Michael Kanellos, March 30, 2010 (Greentech Media)

"Will the second half of 2010 look like the first half of 2009? That's the big fear in the solar industry…Solar is growing. Make no mistake. Globally, 9 gigawatts of solar may get deployed this year…That would be 50 percent growth over 2009. But declining prices for panels and factory capacity will squeeze margins. And changes to subsidy programs may create a situation where demand slows as the year goes on…

"As usual, the big factor determining the health of the industry is Germany. In the first half of 2009, only around 500 megawatts of solar were installed in Germany. In the second half of 2009, approximately 2.5 gigawatts of solar were installed in the country…"

Authoritative solar industry analyst iSuppli Corp predicts the German market to fall off and then come back. (click to enlarge)

"Germany, however, is set to readjust its feed-in tariff on July 1. The tariff for rooftop installations will likely decline by 16 percent and 11 percent for ground-mounted installations…The industry may not sink…[like] in 2008 and 2009 as the German market slows, but it will likely, palpably slow…By the middle of the year, modules might sell for $1.50 to $1.75 per watt in Germany. But if demand dips, the prices may have to dip toward $1.35 a watt in Germany. Not everyone will be able to sell at that price and make money…

"How bad the drop is depends on a variety of factors. Italy could soak up a lot of the modules now coming out of factories. Italy installed 544 megawatts of solar in 2009 and 47 percent of that total came in the last two months of the year…The margins for independent power providers in the country is quite healthy, helped in part by high prices for conventional power in Italy. Up to a gigawatt could get installed in Italy this year…"

Solar Industry authority Paula Mints sees growth in the longer term. (click to enlarge)

"The U.S. market will likely grow by nearly 50 percent with 830 megawatts of solar planted on roofs and in the ground this year. Subsidies in five states -- Hawaii, Massachusetts, New Jersey, California and New Mexico – [so]…solar in commercial installations can actually cost less than grid power…[I]n Hawaii…[it could be] 17 percent less than power from the grid…Over time, the U.S. will be the largest market in the world…[It may] not be enough to offset the anticipated…[dropoff in Germany] in the second half of 2010…[and] Grid "parity" may [be irrelevant if] …grid interconnection [cannot] be worked out…

"…In 2008, only 17 PV manufacturing facilities existed [in the U.S. but by]… 2012, there could be 51…170 thin film manufacturers exist, but only a few will ever become full-fledged mass manufacturers…Twenty new amorphous silicon manufacturers came into the market last year…By 2015, silicon solar panels should cost 80 cents per watt while thin-film solar panels should average around 55 cents a watt. The best amorphous silicon makers can produce modules for $1 now…The few copper indium gallium selenide (CIGS) manufacturers are at $1.1 per watt…]E]xpect [panel] surpluses as time goes on…"