Overcapacity to edge out 180 solar panel makers by 2015: report
(Reuters) - Overcapacity in the solar industry is likely to result in at least 180 panel makers either going bust or being acquired by 2015, according to a research report released on Tuesday.
GTM Research estimates that global solar products supply will exceed demand by 35 gigawatts on average annually over the next three years. The largest number of casualties will occur in high-cost manufacturing markets such as the United States, Europe and Canada, GTM said.
GTM's report, which analyzed more than 300 panel makers, identified Germany-based Solarworld AG SWVG.DE and Conergy AG (CGYGk.DE) and Spain's Isofoton and Solaria Energia y Medio Ambiente SA (SLRS.MC) as possible buyout targets.
"The writing is on the wall. These companies will either take what they can get via acquisition or they will bow out," analyst Shyam Mehta of GTM Research wrote in the report.
Manufacturing costs for European, U.S. and Japanese firms are over 80 cents per watt, compared with 58 to 68 cents per watt for Chinese companies, Mehta said.
A few high-cost European makers have already found buyers. Creditors of Germany-based insolvent Q-Cells, once the world's largest maker of solar cells, approved a sale in August to South Korea's Hanwha Group (000880.KS).
But consolidation in the sector so far has done little to relieve overcapacity, said Mehta.
He expects nearly 60 percent of existing solar suppliers to get edged out between 2012 and 2014.
"I think insolvencies, plant closures and market exits will easily dwarf M&A activity. There is no question about that," Mehta told Reuters.
The report estimates that 54 of the 180 firms to go out of business or acquired will be Chinese. The number could have been much higher but for China's aggressive plan to raise solar power capacity by 40 percent to about 21 gigawatts by 2015.
China's state-run banks have extended billions of dollars of credit to solar companies. In the latest sign of state patronage, the China Development Bank Corp CHDB.UL earlier this month said it would prioritize loans to 12 top solar companies.
"Profitability in the solar supply chain will continue to be extremely challenged until and unless there is significant capacity rationalization in China," said Mehta.
(Reporting by Swetha Gopinath in Bangalore; Editing by Sriraj Kalluvila)
- Exclusive: Malaysia plane probe narrows on mid-air disintegration - source
- Radar showed missing plane may have turned back: Malaysia military
- Missing Malaysian jet may have disintegrated in mid-air: source |
- Malaysian plane presumed crashed; questions over false IDs |
- Merkel raps Putin as Russian forces tighten grip on Crimea |