Intersolar 2011: The great glut dominates show chatter

Probably the biggest topic of the Intersolar show-floor chatter is the supply glut situation that has been overtaking the industry over the last quarter or so, reports eiQ Energy’s Oliver Janssen.

by Oliver Janssen, CEO, eIQ Energy

Hello from Intersolar 2011, where the first day brought very good crowds to the show floor, and some interesting perspectives on the state of the solar industry.

Probably the biggest topic of show-floor chatter is the supply glut situation that has been overtaking the industry over the last quarter or so. This is affecting both the module and inverter markets, and stems from a combination of a reduction in governmental incentives in Europe (which slows demand) and the arrival of new suppliers seeking a toehold in solar (which increases supply).

We’ve seen several new inverter and module companies at the show; reports suggest that there are now as many as 500 companies making solar modules. And while inverters were on allocation just a few months ago, one of my colleagues joked today that we might soon see inverter makers offering free toaster ovens as purchase incentives.

Several of our team members lived through the heady growth years of the hard disk industry, and they see parallels — you have a relatively large number of competitors with little differentiation, each competing primarily on the basis of price. Survival in a situation like this requires either strong differentiation, deep pockets, or both.

One opportunity for differentiation is the possible incorporation of electronics (micro-inverters, DC optimizers, or DC-to-DC converters) into the module. But there’s a definite sense that module makers don’t want to hitch their wagons to any single vendor, or assume warranty responsibility for electronics. Our guess is that we’ll start to see module makers offer certification-type programs, where electronics from certain suppliers are pre-qualified for compatibility.

We’ll be back with more tomorrow; until then we?ll be doing more meeting and more talking, and perhaps enjoying some of the beer that’s pretty much omnipresent on the show floor this year — seems like there’s a keg in half the booths. That’s one way to pad the impact of a downturn in a growth industry!

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