Let’s face it, 2011 was a rough year for the solar industry. Navigant Consulting’s Paula Mints takes a look back at the year’s prominent happenings in solar, and offers 10 resolutions for 2012 amidst what is likely to be even more upheaval.
January 4, 2011 – Let’s face it, 2011 beat the crap out of the solar industry. While manufacturing costs improved — as costs always do, in a steady trustworthy manner — prices for PV technology crashed, driving industry pioneers and startups out of business. Dumping charges in the US divided industry participants into separate and sometimes vitriolic camps that behaved not unlike some primary-bound Republican candidates. Multi-megawatt installations formerly meant to be CSP switched to flat-plate PV. Instead of top-10 manufacturer lists, pundits prepared lists of winners and losers. One big oil company got into solar (Total), while another big oil company bowed out (BP). With markets teetering on the edge of collapse in Europe, manufacturers rediscovered remote and unsubsidized markets, announcing that these historic and (*cough*) stable markets were the future for the solar industry. At the end of 2011, the industry lost one of its own: Brian Robertson, CEO of CPV company Amonix.
It seems that we, referring to the global solar industry, lost a bit of our sanity in 2011 as crisis after crisis forced us to face the fact that gigawatt levels of manufacturing capacity along with high inventory and decreasing FiT levels might just be too much for one still relatively small and incentive driven industry to handle. Here are 10 resolutions for 2012, presented to help keep the industry sane in the midst of upheaval.
Stop the infighting. Solar industry participants should stop taking sides against each other and realize that the true enemy is subsidized conventional energy. Focus on the real goals.
Wait out the pricing war. Flat-plate PV technology manufacturers should stop the rush to the bottom in pricing before everyone goes out of business. Currently, there are high levels of inventory on the demand and supply sides of the industry, and it must be worked off before prices can increase — and like it or not, prices need to increase.
Be real with roadmaps. Technology and cost roadmaps are not data, nor are they facts — they are marketing tools. Stop presenting them as anything else.
Forecasts aren’t facts. Recognize that announcements are not data, and stop reporting them as set in stone. Even signed contracts can be, and often are, broken. Forecasts should not be based on announcements.
Feds: Manage your expectations. To the US Government and investors: Overly aggressive expectations for technology development do not drive progress, they retard it, often killing off promising technologies that need years to nurture into commercialization. There is no magic solar technology that will move from idea stage, through R&D, through pilot stage, to multi-megawatt commercial production in a year or two.
Manufacturers: Quality and cost go together. To technology developers: We need you. Keep going. But never forget market realities and the twin goals for all solar: higher conversion efficiency and lower manufacturing costs. These goals work together and you cannot separate them. (To all thin-film manufacturers: hang in there! To CPV: you are on the cusp, stay the course! To CSP: tough times ahead, tough it out! To c-Si: for goodness sake, stop adding capacity!)
Everyone: Stop the capacity! And because it deserves its own number on this top ten list, to all PV technology manufacturers: For heaven’s sake, stop adding capacity for a while! Or at least slow down. You are not going to miss the boat by pulling back — but you will sink the boat you are currently on by excessive capacity building.
Don’t fear FiT changes. Markets for solar without incentives — primarily off grid, but also grid connected — will take a long time to develop, and will have to be addressed differently. Margins will be lower than in the heady first days of the FiT, but this is better than no margins at all. Are these markets sustainable? Yes. Are they difficult and perhaps initially unprofitable? Yep. Are PPAs the answer? Only partially.
Stop overloading fragile FiT markets. (Italy, Italy, Italy). Building today for tomorrow’s FiT may mean no FiT, and a bankrupt installation.
Everyone: Can’t we all get along? Finally, as the solar industry faces a tough correction year or two, some unity of purpose (survival) might be good for everyone — we can be both competitors and collaborators. These two concepts are not mutually exclusive.
Some struggles are worth it, and solar, with all the good it brings on multiple levels, is the future, and is worth the effort and the expense.
And finally, a heartfelt goodbye to Brian Robertson. This first column of the year is dedicated to him and all that he accomplished.