The last couple years have been difficult for the solar industry, but in 2013 we are likely to see consolidation that will bode well for the long term. In 2011 and 2012 we saw major reorganization in the solar industry. In 2011 there was a 66 percent loss on the Ardour Solar Energy Index (SOLRX) and last year there was a 35 percent loss.
In 2012 only one of the major solar companies posted a tiny profit, and companies averaged over $28 million in losses. Other solar industry metrics like earnings per share (EPS), price to book ratios, sales growth and analysts projected earnings are similarly disheartening.
According to IHS iSuppli Market Intelligence, the number of PV suppliers is expected to plunge by 70 percent in 2013.
As reviewed in a report titled "The Critical Decade: Global Action Building on Climate Change," new solar power capacity in China has risen by 75 percent in 2012 and is expected to triple by 2015. Globally, the capacity of solar photovoltaic panels increased by 42 percent in 2012.
Solar companies are coming to terms with the economic realities of oversupply and falling PV prices. It is both a normal and a healthy part of the growth of any sector that market forces will kill the weak and enable the strong to thrive. Bankruptcies and mergers should not be interpreted as a sign of the overall weakness of the industry. It is more accurate to appreciate the changes in the solar sector as the birth pangs of an industry that is coming of age. In the final analysis the death of some will help the industry to prosper in the long run.
© 2013, Richard Matthews. All rights reserved.
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In 2012 only one of the major solar companies posted a tiny profit, and companies averaged over $28 million in losses. Other solar industry metrics like earnings per share (EPS), price to book ratios, sales growth and analysts projected earnings are similarly disheartening.
According to IHS iSuppli Market Intelligence, the number of PV suppliers is expected to plunge by 70 percent in 2013.
As reviewed in a report titled "The Critical Decade: Global Action Building on Climate Change," new solar power capacity in China has risen by 75 percent in 2012 and is expected to triple by 2015. Globally, the capacity of solar photovoltaic panels increased by 42 percent in 2012.
Solar companies are coming to terms with the economic realities of oversupply and falling PV prices. It is both a normal and a healthy part of the growth of any sector that market forces will kill the weak and enable the strong to thrive. Bankruptcies and mergers should not be interpreted as a sign of the overall weakness of the industry. It is more accurate to appreciate the changes in the solar sector as the birth pangs of an industry that is coming of age. In the final analysis the death of some will help the industry to prosper in the long run.
© 2013, Richard Matthews. All rights reserved.
Related Articles
America Surpasses a Solar PV Milestone and Keeps Going
Breakdown of Solar Demand in Q1 & Q2 2013
Deutsche Bank Revises its PV Forecasts for 2013
Ambitious Growth Predicted for Solar in 2013 and 2014
Solar Increasingly Sustainable Even Without Subsidies
Jinko Solar: Silicone Procurement at the Heart of its Success
Outlook for the Chinese Solar Industry in 2012
US Solar Energy Review and 2012 Forecasts
Renewable Energy in 2012: The Global Economic and Environmental Climate
Renewable Energy Is Our Only Hope
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