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Solar Industry in Germany is Experiencing Crisis

published: 2011-01-07 14:02

According to an article published by Germany’s Manager Magazine on December 22nd 2010, the solar industry in Germany is experiencing crisis, being unable to increase profits from increasing PV installations. For instance, although 2010 was a blooming year for German stocks, the share price of Q-Cells, once the largest PV installer in the world, dropped from 13 EURO in the beginning of the year to 2 EURO lately. Other companies in the industry observed the same predicament.

Lack of purchase order is deemed the most pressing problem. German government dramatically shredded subsidies for PV-generated electricity, leading individual households to become more sensitive about cost effectiveness of PV installations. Chinese products are more competitive in terms of pricing, which is about 20% cheaper than those of German makers. German makers view Chinese products as a thread. Some industry analysts say the German solar industry needs reshuffle. Companies need to find a way to bring down costs to increase more competitive advantages. In the long run, only two to three PV companies can survive in this competitive market.

In the beginning of 2010, German government estimated the annual installation to be 3500 MW but the actual volume could be more than twofold. Experts expect that the installation volume could reach 6000 to 9500 MW in 2011. The significant growth could mean that there is still room for further subsidy cut. Electricity subsidy cut can be advantageous for stimulating and maintaining the competitiveness of renewable energy industry in the long run. Spain cut the electricity subsidy by 20-45% starting in 2011 and Italy did so by 15%.

According to Solarbuzz, solar cells grew 117% in 2010. Based on the research conducted by Solarbuzz, shipments of global solar cells reached 4 GW in third quarter of 2010, an annual growth compared to the same period in 2009. As far as the total revenue of the whole industry, the third quarter amounted 17.9 billion dollars with a growth rate of 74%. The accumulated global PV installation increased to 10.6 GW in the first three quarters, therefore Solarbuzz adjusted the global demand upward to 16.3 for 2010 with an annual growth rate of 117%.

Solarbuzz also pointed out that shipments from Chinese makers increased from 47% to 51% of global shipments.

As Germany and Czech Republic changed their policies, Solarbuzz forecasts that growth of global demand for solar cells may slow down to 20.4GW in 2011.

The president of Solarbuzz indicated that price drops in 2009 led to the tremendous market growth in 2010. However, with the intention to expand capacity further in 2011, manufacturers need to show even more significant price deduction to stimulate market growth.

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