Monday, July 25, 2011

Another Disappointing Quarter for PV Solar Firms

It's earnings season, and we are seeing another disappointing quarter for photovoltaic solar panel makers. Subsidy cuts in European countries have crushed demand for PV panels, resulting in a glut of capacity in the industry.

SunPower missed estimates, but now that it is majority owned by Total it will have a leg up on the competition.

The Greentech Solar blog has some very intelligent commentary about the dynamics of the PV solar industry.

Go to a show like Intersolar. You'll see rows and rows of nearly identical crystalline panels. Solar panels in some ways have become the energy world's equivalent of flash memory chips: technically challenging products to manufacture that get sold like commodities. Staying in the market means spending billions to just break even: at some point, it's not longer a business for some manufacturers. It's more like a bad gambling habit.

The economics surrounding panels helps explain why balance-of-system costs will soon account for more of the cost of a solar system than the panels themselves.
The small cap PV solar stocks where the marginal buyers are retail are not being priced correctly.

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