A STUDY OF SUN

Global Solar Energy Outlook; Solar Demand Dynamics, Cost Structures, Policy Factors, and Competitive Differentiators for Suppliers: Market Analysis and Forecasts
Dave Cavanaugh and Clint Wheelock, June 29, 2010 (Pike Research)

"…[S]tarting in about 4Q 2008, a scant six quarters ago, the solar industry abruptly moved from a supply-driven market to a demand-driven market, resulting in…Financial performance of world leaders in solar cell and module manufacturing plunged to devastating losses and low-cost manufacturing, while maintaining module efficiency defined new world leaders…[A] financial crisis second only to that of the Great Depression…Technologies…struggling to survive…and…Module average selling prices (ASPs) fell so fast that the road to grid parity was redefined…

"This report examines these events and defines…the key drivers…and the new solar market…[It] projects that the supply of solar modules will greatly exceed demand in 2010…Pike Research believes that the forecasted 8.2 gigawatts (GW) of unsold inventories in 2010 is unsustainable and will result in the consolidation of less competitive cell and module manufacturers."

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"Which companies will survive and lead…Which companies…are the most likely candidates for closure or acquisition…What are the…competitive capabilities…Which module technologies will grow…why are cadmium telluride (CdTe) modules leading the Market…?

"This report answers these questions…[and] Describes the market shift and the root causes…Forecasts demand of 10.1 GW…and projects that solar demand will grow to 19.3 GW by 2013…Forecasts a significant oversupply of solar modules reaching 18.3 GW under a most likely scenario in 2010 that will be produced by 193 cell and module manufacturers…Separates the large number of manufacturers into Tier 1, Tier 2, and Tier 3 categories…"

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"…[It projects] that the 11.8 GW of Tier 1 capacity alone could supply the entire solar market in 2010… Asserts that low cost per Watt ($/W), in combination with efficiency, is now the main competitive differentiator…Lists and details other competitive differentiators…Charts revenues, gross margins (GMs), silicon costs, non-silicon costs, and ASPs of Tier 1 companies…Reviews restructuring, emerging, and current low-cost Tier 2 companies likely to survive consolidation…And, finally, reviews Tier 3 companies…

"…[W]ith module ASPs falling to under $1.50/W by the end of 2010, according to Pike Research analysis, solar market growth is set to grow at a 24.5% CAGR from 2010 through 2013 to reach 19.3 GW…[I]f demand, particularly in the United States and China, is spurred by even lower module ASPs and higher fossil fuel-generated power cost and grows at a faster pace, total worldwide demand for solar modules could exceed 26 GW…[T]he solar market looks to be poised for sustainable growth that outpaces most other markets…"