August 12, 2009 - The glut in the world's PV panel capacity is so bad (insert hokey en-masse Match Game-esque audience retort, "How bad is it?") that half of all panels made this year won't sell, and current supplies won't be burned down for three more years, according to recalculated estimates by iSuppli.
Total solar panel production will increase an estimated 14.3% this year to 7.5GW, but only 3.9GW of that will actually get installed, the firm says. Partly to blame is Spain's pulled back on its solar-friendly policies, the impact of which has been felt throughout the supply chain from polysilicon to PV cells to complete systems, notes Henning Wicht, iSuppli's senior director and principal analyst for photovoltaics. (No mention, though of China, which is a main source of the capacity push, thanks to many firms including ReneSola, JA Solar, Yingli, Suntech, etc.) Also partly to blame are the suppliers themselves, who have continued to pump out products "as if a recession had never occurred" in order to maintain market share, he writes. The upshot is that panels will sit in inventory for as long as 2012, until installation demand will finally be able to absorb both production and inventory, he notes.
That push by suppliers is also reshaping their market landscape too, Wicht notes -- Suntech will ascend to the No.1 producer of crystalline silicon (c-Si) solar cells in 2009, while Sharp, Yingli, and JA Solar will maintain their spots by maintaining their output. Those cutting back in response to slowing demand -- and suffering market share declines -- include former-No.1 Q-Cells, as well as SunPower and BP Solar.
Update 8/13/09: Stefan de Haan, iSuppli senior analyst for photovoltaics, answers our question about whether China can plug some of the demand gap. Though China has "significant potential" it is still a developing market and a "wild card" for solar demand, he said. A subsidy program announced in March addressed only large rooftops, and while the July "Golden Sun" program represents "a serious effort [that] will definitely stimulate the sector," he says China "simply lacks infrastructure, in particular in the installation segment." Government subsidies target ~500MW for two or three years, he said, and he expects no 1GW installations in China -- "a few hundred MW per year are possible until 2010, [but] not more." With Spain's 2.6GW in 2008 (nearly half the world's total) slashed to 0.5GW in 2009, there's still a big ~2GW demand gap.
|Previous and current global solar panel production, crystalline and thin-film. (Source: iSuppli)|