Actionable news
0
All posts from Actionable news
Actionable news in SEDG: SolarEdge Technologies Inc,

Solar Industry Braces as Looming Glut Threatens to Erode Prices

  • Panelmakers boosting capacity 18% this year as demand slows
  • Supply glut comes five years after industry’s last downturn

Solar manufacturers that are ramping up production now face a looming glut of panels, forcing companies to adjust or face dire consequences.

Trina Solar Ltd., Canadian Solar Inc. and JinkoSolar Holding Co. are among the suppliers boosting output at factories that will expand global capacity by 18 percent this year, according to Bloomberg New Energy Finance.

The manufacturers are locked in a race to build bigger and more advanced factories to crank out panels faster and cheaper. Just as they start rolling off the lines, demand is expected to slow, especially in China where the government rolled back subsidies last month. Prices are slumping, and suppliers expect margins to slip as well. It’s a pattern we’ve seen before, after a global oversupply five years ago drove dozens of companies out of business.

“Oversupply appears to be business as usual in the solar industry,” said Jenny Chase, New Energy Finance’s lead solar analyst.

The solar industry went through a similar boom-bust cycle after capacity grew faster than demand, triggering a two-year slump starting in late 2011. The result was a wave of consolidation as prices plunged and panelmakers’ losses piled up. Cheap panels also helped spur demand for more solar power, eventually prompting the survivors to expand production.

Prices, Margins

“These companies are all fighting for market share and their tendency is to build more and more capacity,” Pavel Molchanov, an analyst at Raymond James...


More