3 companies that are leading the U.S. solar boom
The rapid drop in solar panel prices over the summer has simultaneously fueled a commercial-scale project boom in the United States and created market conditions that a handful of companies are benefiting from -- and an increasing number are struggling to survive.
Research firm Solarbuzz reported Monday that a steep drop in panel module prices prompted a growing number of businesses, utilities and other organizations to invest in solar photovoltaic installations. The pipeline of non-residential solar projects in the U.S. rose 41 percent from 17 gigawatts two months ago to 24 gigawatts today, according to Solarbuzz.
Those falling prices also have created turmoil in both the commercial-scale and residential solar markets. Sales are up, but prices are falling even faster with a consequent drag on profits. The upshot? A handful of companies are dominating the market, while others scramble to remain competitive.
The top solar panel suppliers
Within the existing pipeline of commercial-scale projects, the top three panel suppliers are U.S. companies First Solar and SunPower Corporation as well as China's Suntech Power, Solarbuzz said in its report.
All three companies have excelled at keeping manufacturing costs low in part by putting factories low-cost locales in Asia. First Solar, which makes thin-film panels coated with cadmium telluride, continues to push its manufacturing costs down and says it can now make modules for $0.75 per watt. It aims to reduce the cost of production to as little as $0.52 per watt by 2014, Bloomberg recently reported.
That's in stark contrast to the business model of the recently bankrupt Solyndra, which only worked when costs of materials like silicon remained high. Costs dropped precipitously after China’s state-run banks handed out billions of dollars in loans to homegrown solar companies including Suntech and Trina Solar. A supply glut and financing compounded problems and an unprecedented consolidation of the solar industry has been underway ever since.
In the past two months, SolarWorld announced it will close its California factory and shift its U.S. production to a bigger plant in Oregon; Solyndra filed for bankruptcy; Solon said it will close its Tucson solar module factory; Evergreen Solar filed for Chapter 11 bankruptcy and Ascent staved off its demise by agreeing to sell a stake in the company and license its technology to China’s TFG Radiant Group.
While these companies have struggled to compete with low-cost manufacturers in China, First Solar has expanded. The company built its first thin-film solar panel factories in the U.S. and Germany, where it derived most of its sales, and then later expanded in Malaysia. The company is building a new factory in Mesa, Arizona to supply panels for First Solar's 2,600 megawatts worth of North American planned projects. Production is expected to begin in the third quarter of 2012.
Meanwhile, SunPower has increased production at its Malaysia facility, opened a factory in California, expanded its European manufacturuing location and announced plans to own and operate a 320,000-square-foot factory in Mexicali, Mexico.
Competition heats up
Keeping manufacturing costs low will be critical moving forward as more companies jump into commercial-scale solar. Solarbuzz reported that Chinese manufacturer Yingli Green, Japan's Sharp and Germany's SolarWorld are increasing their presence in the market.
Photo: First Solar
This post was originally published on Smartplanet.com