Excess photovoltaic modules to lead to consolidation - report

19 May 2010 13:55  [Source: ICIS news]

LONDON (ICIS news)--Oversupply of photovoltaic modules in the solar market will lead to the consolidation of weaker competitors, market research and consulting firm Pike Research said on Wednesday.

Pike Research said that although the demand for solar power would experience strong growth this year, market overcapacity will mean many companies will face low profit margins and be forced to combine businesses.

“The solar market is now faced with a gross oversupply of modules,” said Dave Cavanaugh, a senior analyst at Pike research.

“The industry is currently supplied by more than 190 cell and module manufacturers, making consolidation of weaker competitors an inevitable outcome,” he added.

Cavanaugh also said an increase in competition would create downward pressure on module average selling prices.

The rise in demand for greener and cleaner energy sources, specifically for solar panels, has fuelled the increasing need for solar photovoltaic cells, and the demand for raw materials produced by chemical companies, such as polysilicon.

In April, DuPont announced it expected to increase its photovoltaic sales by 50% in 2010 due to strong growth in solar industry markets in Europe, North America and parts of Asia.

Eric Nichols, vice president for business management at Saflex, a subsidiary of US producer Solutia, said the global photovoltaic market was likely to grow at an annual rate of 25%, in remarks he made at the International Petrochemical Conference (IPC) in March, .

Germany has planned special aid worth some €600m ($732m) to help its solar and photovoltaic industry against foreign competition.

($1 = €0.82)

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By: Franco Capaldo
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