Oct 16 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 and Conergy AG
and Spain's Isofoton and Solaria Energia y Medio
Ambiente SA 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.
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 earlier
this month said it would prioritize loans to 12 top solar
"Profitability in the solar supply chain will continue to be
extremely challenged until and unless there is significant
capacity rationalization in China," said Mehta.