Monday, April 23, 2012

Two Key Numbers Behind The Solar Bankruptcy Headlines

Stories about a solar company in financial distress are about as common as ones about the latest airline bankruptcy.  In the solar world, it is both the best and worst of times, and that strange reality is explained by two numbers.

The global solar boom features booming manufacturing capacity of solar modules and booming solar demand.  But the boom in solar manufacturing capacity so far is bigger than the boom in solar demand, with the result that 40,000 megawatts of solar manufacturing capacity are currently chasing about 28,000 megawatts of annual, global solar installations.

Those two numbers--40,000 chasing 28,000--are the fundamentals behind the highly competitive solar industry.  Only the fittest solar manufacturers will survive by delivering even lower solar prices to customers who are smiling at low solar prices.

And low solar prices are now the main ingredient behind the global boom in solar installations.


  1. John: Do you have any insights into the various solar technologies out there, and which ones are most likely to survive and grow? For example, I have seen articles suggesting that PV is on the way out and CSP is more future-looking. I am not sure if that is mainly looking at utility-scale solar or if it's true in general.
    Thanks for any insight you have.

    1. Currently the trend is toward PV and away to some degree from CSP. PV prices are down to $2.50 per watt or less and have caused some CSP projects to switch to PV.

      CSP, however, has some strengths, including greater dispatchability.