Scott Sklar, Founder, The Stella Group, Ltd
The challenges for all sectors of the global solar industry involve dealing with the countries and companies that are scaling-up manufacturing that drives commodity prices down, continued global subsidization of fossil and nuclear fuels, and industry maturity that is setting up an era of mergers and acquisitions.
What First Solar and China have shown the world is that solar photovoltaics can be scaled like microchips, which seriously hampers mid-sized manufacturers and newer innovative technologies.
The International Energy Agency in October 2011 released a report stating, “Global subsidies for fossil fuel consumption are set to reach $660 billion in 2020, or 0.7 percent of global gross domestic product, unless reforms are passed to effectively eliminate this form of state aid, according to the International Energy Agency. The IEA estimated such subsidies at $409 billion in 2010, compared to $312 billion in 2009.”
Just like other electronics and energy industries, the maturing solar industry will drive the thousands of solar technology and component companies to merge to build economic and corporate strength to tackle global markets. The concentrated solar, photovoltaics, and solar water heating companies are numerous and are just beginning to enter the stage for consolidation. The first symptom is bankruptcies, but this actually just subjugates the investments so others can pick up at “sale” prices.
I predict that in the next decade we will begin to see the merger-acquisition phase in full swing, which will begin positioning more than one hundred companies for global markets rather than the one thousand plus companies we have now. According to Bloomberg Energy and Pew Trusts, private sector investments in renewable energy topped $269 billion in 2011, and the market is still growing at double digits. The global market size and technology maturity are at a threshold for an entire repositioning of the industry in what will be the next stage of unprecedented growth in a more rough and tumble global marketplace.
Scott Sklar runs a clean energy technology optimization and strategic policy firm, The Stella Group, Ltd, which he founded in 1995 and came on full time to lead in 1999. Previously, Sklar served as Executive Director for 15 years of two national trade association concurrently, the Solar Energy Industries Association and the National BioEnergy Industries Association.