Solar Panel Glut

Solar stock lovers, here are a few articles reporting a glut in solar panels likely to persist for years. – Ilene

Solar Panel Glut Will Scorch Small Players (CSIQ, FSLR, SPWRA)

Courtesy of Lawrence Delevingne at Clusterstock

The predicted story of 2009 for solar — crushed demand leading to a major glut in panels — is playing out even worse than expected.

A new report from research firm DisplaySearch says solar panel production is up 56% this year versus last, while demand is down 17%.

This wild imbalance will clobber the small fish in the market.

Charles Annis, author of the DisplaySearch report, tells us to expect "rapid price declines, building inventories, lower profit margins, losses for many, and likely some industry consolidation."

It’s not all bad. "The current ‘Solar Cycle’ is severe due to changes in policy and the economy, but another boom will come and the industry will continue to grow and mature."

Stefan de Haan, senior analyst of photovoltaics at iSuppli says the over-supply is going to be monstrous. "Our actual numbers translate into a module oversupply of 90% this year. This is the peak of the module "glut". From 2010 on, the situation will ease due to adjusted production volumes and increased end-user demand."

So, who’s in trouble? iSuppli’s de Haan mentions Solon (one of the biggest European producers) and new polysilicon manufacturers using the "Siemens" process, many of them from China.

Climatewire points to to Advent Solar, DayStar Technologies and Blue Square Energy as "among the solar companies in the United States that are feeling the pinch and could be shaky."

But why are big fish like First Solar (FSLR), SunPower (SPWRA) and Canadian Solar (CSIQ) — who all turned in good second quarter financial results — doing well?

"In most cases, costs will be decisive," says de Haan. First Solar benefits from a cost advantage, SunPower has a better brand so it can command a premium, and "they benefit from the developing Californian market – small in absolute numbers, but growing significantly."

Adds Annis: "The PV supply chain is very broad based. The effects of the glut affect different companies quite differently. The companies you mention are all market leaders, are vertically integrated, benefit from scale of manufacturing and long term supply contracts. They have low costs per watt and even with the dramatic reduction in module pricing, costs may still be above pricing and they remain profitable. It is the smaller, non differentiated makers, with much higher costs, that feel the glut the most."

Solar Panel Glut To Persist Until 2012, iSuppli Predicts

Posted by Eric Savitz, Barron’s Tech Trader Daily 

Future Hazy for Solar Stocks

By the tickerspy.com Staff, Yahoo Finance

Technology research firm iSuppli expects solar panel production to jump 14% this year to 7.5 gigawatts, according to The Wall Street Journal Environmental Capital Blog. Unfortunately for solar investors, not all of these panels will be put to use. As explained by iSuppli’s principal solar analyst Henning Wicht, "almost one out of every two panels produced in 2009 will not be installed but stored as inventory." According to The Journal’s report, the research firm expects global installations to total 3.9 gigawatts this year, and says overhang could last until 2012. Should these expectations come to fruition, the oversupply could potentially "set the stage for failure of multiple cell manufacturers," says Charles Annis, author of an even more pessimistic DisplaySearch report. Investors are dumping shares of solar stocks across the board today with Chinese players feeling the most pain…

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