Supply and Demand Imbalances in Solar Mark the Perfect Time to Innovate

One year ago, when solar PV panel deals were done on yearly allocation it would have been nearly unthinkable that a solar installer would have access to panels at will. At that point, polysilicon prices were high, on one end of the supply chain and demand was strong at the other end.

These days however, the industry is seeing poly prices that have dropped to the lowest prices in close to a decade, demand is soft because of both falling prices and a weak economy. Meanwhile, manufacturing prices have remained relatively stable. The situation is unstable. Something has to give, just where, and when that will take place it what I explored this week at Intersolar North America.

The event, which grew by close to 300% from last year, played host to many of the industry’s leading companies. Stephen Lacey and I had a chance to catch up a number of them throughout the week. To talk about what the solar market shapes up like from each of their unique perspectives.

First up was Applied Solar’s president Charlie Gay. Gay told me that today’s market gives companies like an Applied an opportunity to innovate. He pointed to the company’s new Fab2Farm program which will cite production and end use in one area as a way to bring down costs and get solar where it can have the biggest impact…::continue::

One of the biggest myths out there, according to Borrego Solar CEO Mike Hall is that there are 100’s of megawatts of panels sitting on a ship somewhere off the coast of Spain that are failing to hit the market. Rather he told me, his company is working to adjust to a new level of lead time for projects, and is dealing with commercial, industrial and government buyers who won’t pull the trigger on a new purchase until prices have stopped falling.

Paula Mints from Navigant Consulting echoed that sentiment explaining that the market is what drives prices, and unfortunately when demand is soft, those waiting to make a solar purchase are sure to hold out to make sure they get the best deal possible. She explained in a recent editorial, as well as during an interview with me, that companies will start to sell at a loss and it will be a real test for some to give up sales in that environment and simply ride out the storm.

In addition to manufacturers and installers we spoke with some component and service firms about how the market is effecting them. Fat Spaniel CEO Matt Powell told Stephen Lacey that this was the perfect environment under which to start a new initiative to bring standards to data and monitoring sides of the PV industry. To further that goals, Fat Spaniel and a number of other companies announced the launch of the SunSpec Alliance to defining open data standards for the renewable energy and photovoltaic (PV) industries, which Powell says will help the industry emerge stronger and smarter in the coming months.

Sixtron Advanced Materials’ mission is to bring down the cost of manufacturing by removing the need for expensive and dangerous silane gas both in the traditional crystalline silicon solar space. The company’s VP Bates Marshall said that despite the drop in silane prices companies are still recognizing the long term cost reduction that can come from using the much more stable polymers that are a part of the company’s Sun Box systems.

While thin-film technologies have been around for more than two decades, their recent rise has been the result of low manufacturing costs, which result in lower installed costs. Abound Solar’s director of marketing Mark Chen said while commodity prices for Cadmium-Telluride (CdTe) have fallen, the drop hasn’t been as precipitous as in silicon.

This is a mixed blessing for the thin-film segment of the industry. While it remains close to business as usual for thin-film firms, in some cases silicon based modules are being sold at prices only a few cents higher, and that, Paula Mints said will mean more sales for silicon cells since they do still boast higher efficiencies.

Look more from these interviews in the next couple of weeks as we try to give you a better look at what the market dynamics look like in solar and when they might change.

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Former Editor at RenewableEnergyWorld.com, now Assistant Counsel at the New York State Department of Public Service, regulating New York's electricity, gas, and telecommunications industries.

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