Foxconn is getting into the solar module making game.
The maker of iPhones is used to working on razor-thin margins and will change the game for the industry. While most module makers are used to making margins north of 20%, the entry of mass market players like Foxconn will drive costs down, take out inefficient module makers and encourage installation by a further reduction in market pricing.
Add into the mix recent announcements by Oerlikon, GE and Panasonic, all targeting well under $1 cost per watt for finished modules, it would seem to mean that the days of solar modules costing over $1 are over. The addition of 800MW of capacity by GE and Panasonic alone will ode badly for small to midlevel players who have taken a “commodity” approach to the business, yet it will feed an industry into deeper market penetration as the cost of solar approaches, and in some markets beats, the cost of other grid-tied utility rates.
2012 is certainly looking to be a game changer for the market. Many in 2011 had said that they expected pricing to firm up given the fact that many players have closed and more will close, however I do not think that we’ll see that happening. Despite solar wafer makers attempts to negotiate higher prices, they have not been successful so far. What we will see is a firming of pricing around the $0.75 (thin film) to $0.90 (crystalline) marks and this until further reductions in costs are brought by firms such as Foxconn. They are possibly the first contract manufacturer to get into the game in a big way, yet they won’t be the last.
Sass