This solar blog was started in 2005 when prices for solar modules hovered near the $3 per watt range. Ever since the beginning of time, pundits have been predicting that when the industry gets to $1 per watt, we will have found heaven.
Well, we’re there. Today a Deustche Bank report shows Tier 1 out of China being shipped at sub $1 ($0.95) so you can bet that tier 2 and 3 are nearer $0.90. This is far before anyone expected this (most were calling for $1.10 by end of year for tier 1) and therefore will continue the downward pressure on stocks.
So how is the reaching of this milestone “heaven” for the solar industry, when so many are bleeding? Well the question begs…is it sustainable? (pun definitely intended), and what does this mean for lower efficiency solar technologies such as amorphous silicon?
To answer the first question, I believe we’re going to see some further exits beyond Solyndra in the coming months, as well as consolidation. There are few companies with deep enough pockets to take out the costs necessary, in the time they have, to be profitable at these price levels.
To answer the second question, I believe it remains questionable to be producing any thin film below 11-12% efficiency and with a cost of any more than $0.70 per watt. While thin film does capture more daylight across the rise and fall of the sun, giving it boost of up to 25% on daytime production on a watt to watt comparison, the reality is that the added cost of BOS, in a challenged environment, will trump those benefits, unless the price adjusts accordingly. I think this will be particularly tough on flex technology providers who don’t have a good rooftop program to supplement the specialty products markets they tend to hover around.
With the Solar Power International show in Dallas just around the corner (next week), it sure will be interesting to see the faces of the sales teams in light of this recent further price drop. You can bet a few CVs are going to be circulating and much wonderment at who will survive these levels.
Yet in the end, this is what an industry which is maturing must go through, and learn to stand on its own legs. The next part of the value chain that will need efficiency gains is the installer base, yet that’s a topic for another day.
Sass