Levent Gun, CEO, Ampt, LLC
At an industry level, there are several macro forces at play. First, decreasing and uncertain solar incentives, such as feed-in tariffs, are making projects more difficult to finance. This puts incredible pressure on project developers to lower capital costs of PV plants. Second, the high-growth opportunity of solar has attracted countless new entrants who have been in an arms race to gain cost advantage by scaling capacity. So, there is oversupply through much of the supply chain. Third, shifting solar incentives and massive competition cause companies to serve multiple and moving end-markets, which is expensive and difficult to execute.
These dynamics are prompting solar players to sell products at low, or zero, margins and cut investment. This is especially true for PV module manufacturers and, increasingly, inverter manufacturers who are finding it more and more difficult to differentiate on anything but cost. It is a potentially vicious cycle of margin losses leading to under investment, lack of differentiation, and eventually market share losses or implosion.
To overcome these challenges, solar players must avoid this death spiral. They should protect cash flow, but also invest in the right markets and technology. They must innovate.
Companies should adopt disruptive technologies, such as module-level DC/DC power optimizers, that can lower overall system costs and increase energy production to decrease risk of returns. These types of technologies are quickly becoming a key component in the design of the lowest-cost PV systems by deploying fewer DC cables and combiner boxes, and lowering the cost inverters.
Winners in the industry will need to have the foresight and financial ability to continue to invest in innovation and select the right technologies. This strategy will result in a differentiated offering, protected margins, and a growing market share. This ensures that these companies will be well positioned to capture the growing demand for solar over the coming years.
Levent Gun has more than 25 years of technology experience. Prior to joining Ampt as CEO, Levent was president and CEO of Kleer, a wireless audio semiconductor company. Levent holds a Ph.D. in Electrical Engineering from the University of Maryland and undergraduate degrees in engineering and mathematics from Bogazici University in Turkey.