The welcome end of 2012 approaches and with it hopefully a slowdown
in the steady march of solar failures, depressing financials and mind
numbing trade disputes. Thankfully, the long, long, long, oh so long US
presidential campaign season is over, though another is just 'round the
bend. Hopefully the recession in Europe will be short lived and the
U.S. and other countries will not slip into another recession. Among
these wishes for 2013, 2012 can be remembered for the starkly different
attitudes held by participants along the solar industry value chain.
At the end of 2012,PV technology (cell and module) manufacturers
primarily are holding a view (supported by their balance sheets) of doom
and gloom. Balance of systems (BOS) manufacturers and installers,
meanwhile (enjoying the rewards of low PV module prices) are more likely
to believe that “Everything is Coming up Roses.” To borrow liberally
from the Stephen Sondheim lyrics: Curtain up! Switch on the
inverter! You’ve got nothing to hit but the peak! You’ll be swell,
you’ll be great. I can tell, just you wait. That profitable kWh is due!
Solar, everything’s coming up sunshine for me and for you.
In the U.S. there is currently a tug-a-war between the two
philosophies, with BOS and demand side participants enjoying profits and
seeing strong growth going forward. There is also the view that perhaps
the U.S. should be satisfied with its role as a promising market for
solar installations and step back from manufacturing.
U.S. technology manufacturers and module assemblers see things
differently. From the technology manufacturer’s point of view, a
leveling of the playing field (duties on imports, government support or,
incentives for using U.S. made technology) could help the U.S. industry
spring back to life. Table 1 presents a history of manufacturing from
1997 through 2011. Though this table does show U.S. technology
manufacturing – along with Europe and Japan based manufacturing – losing
share, it also clearly indicates how quickly recovery could be
achieved. In terms of the U.S., it is currently the home of promising
technology startups currently in quiet mode waiting out the doom and
gloom – this is also true for Japan and Europe.
Table 1: Regional Shipment Data, 1997-2011
Figure 1 isolates U.S. demand and supply history from 2006 through
2011. Supply participants are manufacturers of technology. Demand
participants buy technology. Demand participants include module
assemblers, installers, distributors, system integrators, end users and
other manufacturers. Note that in Figure 1, demand continues to increase
while supply decreases significantly. In the U.S., and this is true for
other regions, there are no simple explanations for competitive
difficulties. At this point, with prices at or below cost for most
manufacturers it is not survival of the fittest – it is survival by any
means available.
Figure 1: U.S. Supply and Demand, 2001-2011
To sum up, and borrowing liberally from Irving Berlin’s There’s No Business Like Show Business: There’s
no business like solar business, like no business I know. Everything
about it is appealing, everything the utilities will allow. Nowhere can
you get that happy feeling, then when you are installing that extra
kilowatt hour.
In other words, solar is an addictive business that will continue to
provide value all along its value chain as well as to climate change
doubters and those who chose to stand on the sidelines.
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