2012 Pv Forecast: Industry Value Chain Blues

At the turn of the year, photovoltaics manufacturers are faced with difficult choices: continue selling at prices that do not allow for positive margins, or shutter production and wait for the current situation to settle down.

In 2011, manufacturers from China and Taiwan accounted for 56% of total technology shipped to the first buyer. Technology shipped to the first buyer includes cells and modules from the original technology manufacturer. Technology is frequently reshipped several times, particularly in the current market situation.

The demand side of the PV industry, particularly some very vocal participants in the U.S., argues that if prices increase, it will not be able to do business. But if prices do not increase it will not be able to do business, as the majority of manufacturers will cease manufacturing for a time, or disappear altogether. This would leave a vastly decreased field and prices would rise. No matter what, prices will rise, though with current high inventory levels and gray market selling it will take some time. Prices may not rise to a healthy level until the end of 2012. These increases will be fought and resented, but manufacturers cannot continue selling at the current levels.

The necessary and long-expected correction has finally come. It is uglier than anticipated. Consolidation, bankruptcy and, sadly, slowing of innovation is the short-term reality while manufacturers hunker down to survive.

Source:

renewableenergyworld