January 30, 2012 | 0 Comments
Lux Research analyzes the downstream solar landscape, installers to developers and PPA/lease providers, to sort out high-potential innovators from "me-too" firms.
January 30, 2012 - The volatile swings seen in the upstream part of the solar PV supply chain, from silicon to cell/module pricing, have been well documented. End-market demand and associated policies supporting it is also a roller coaster, with many key regions currently embroiled in what to do for 2012 and beyond.
Meanwhile, downstream sectors in the solar PV supply chain -- those involved with financing, development, and installation -- represent the final step in monetizing a solar PV project. Firms in this universe have created a fragmentation that creates pockets of niche specialists in key areas vs. full turnkey integrators (read: high-margins), and insulates against that upstream sturm und drang.
And investors -- both VC and firms seeking expansion via M&A -- are paying more attention to the downstream side of the industry (see graphic below), seeking to spawn more innovation and leaner business models. Downstream start-ups, led by SolarCity, SunRun, Recurrent Energy, SunEdison, and Solar Power Partners, have raised over $1 billion. (Note that Solyndra raised a billion on its own, in headier times for all involved.) This is "setting up a battle between cleantech industrialists and general contractors/self-funded construction industry veterans," Lux claims.
Conclusions from the Lux study are carved into three categories of developers and installers:
Downstream M&A activity has remained high since MEMC bought SunEdison in Nov. 2009. (Source: Lux Research)
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