Friday, July 8, 2011

Many solar cell makers decline tough orders

Many solar cell makers decline tough orders

While orders for crystalline silicon solar cells have increased, prices have not risen along with rebounding demand and a large portion of orders are with undesirable conditions including high energy conversion rates and bad payment terms such as payment to be made 60 days after delivery rather than by letter of credit. Therefore many Taiwan-based solar cell makers have declined such orders, according to industry sources.

Industry sources pointed out the unstable market condition has been causing solar firms to ship products with great concerns if the customers do not have solid financial performances. If the customers have trouble making payments, the liquidity of the solar firms will be at risk. The price of solar cells have been covering variable costs only, industry sources said, adding therefore firms continue to increase capacity utilization to achieve the best out of the sales.

In comparison with the second quarter, solar cell firms indicated that demand has been returning. Orders have been increasing and as long as firms are willing to take up orders asking for high conversion efficiency coupled with undesirable payment methods, achieving full capacity will not be difficult.

Taiwan-based solar cell firms are Motech, Gintech, Neo Solar Power, Solartech and E-Ton Solar. Most solar cell firms have reported growth in June revenues indicating the recovery of demand in the market.

Thursday, July 7, 2011

US PV project pipeline soars to 17GW, says Solarbuzz

US PV project pipeline soars to 17GW, says Solarbuzz

Following reductions in feed-in-tariffs across Europe, the rapid rise in the photovoltaic (PV) project pipeline in the US market now represents one of the most compelling PV market growth opportunities anywhere in the world.

According to Solarbuzz, the US non-residential PV pipeline now exceeds 17GW. This total comprises 601 projects ranging from 50KW to 500MW in size, with planned installation dates from second half of 2011 to 2015.

California currently accounts for 62% of the total US project pipeline, stimulated by the state's aggressive 33% Renewable Portfolio Standard target. State Renewable Portfolio Standard (RPS) policies have been a major driver in building the pipeline in leading states. The top six state pipelines in megawatt terms are California, Arizona, Nevada, New Jersey, New Mexico and Texas while, in total, 40 states contribute to the pipeline.

The fast developing non-residential segment has created an important and growing opportunity for project developers, engineering, procurement and construction (EPC) companies. The top 12 project developers currently account for 49% of the total pipeline.

The collapse in US factory-gate module prices over the past four months is only now starting to impact large project prices. Installed system prices for planned projects above 1MW have an average price of US$4.50/W DC, and 32% of these projects exhibit prices below US$4.00/W DC.

"With the overall US market size forecast around 2GW in 2011, there remains significant challenges for the 17GW in the pipeline," said Craig Stevens, president of Solarbuzz. "Most notably, these include aligning project structure with financing sources, overcoming regulatory challenges and taking full advantage of recent price movements in the market to procure the best mix of PV system components."

For those projects in the pipeline that have selected their module suppliers, the top three suppliers in MW terms are First Solar, SunPower Corporation and Suntech Power. The leading inverter suppliers to the pipeline are Advanced Energy and SatCon Technology.

Wednesday, July 6, 2011

E-Ton Solar June revenues down 20% on-month


E-Ton Solar June revenues down 20% on-month

E-Ton Solar continues to report on-month revenue decreases. June revenues were NT$215 million (US$7.5 million), down 20.96% on month and 84.67% on year. E-Ton might be one of a few solar cell firms to report a decrease in June revenues.

Accumulated revenues from January-June were NT$5,424 million, an on-year decrease of 28.64%.

According to E-Ton, capacity utilization rate has been low but inventory levels have been high. The current focus is to lower inventory to return to better conditions

Tuesday, July 5, 2011

Some solar cell firms continue to withhold capacity expansion schedules

Some solar cell firms continue to withhold capacity expansion schedules

Due to return of demand, some Taiwan-based solar cell firms have been resuming capacity expansion plans. Other solar cell makers continue to observe carefully before resuming expansion plans. China-based integrated solar firms continue to expand capacity and expect the total capacity of solar cells by end of 2011 will reach 40GW. Taiwan's total capacity will reach around 10GW, estimate equipment manufacturers.

Demand is expected to return in the third quarter, many solar firms have been experiencing increasing capacity utilization. According to international equipment providers, many capacity expansion plans have been delayed due to weak demand in the second quarter. As demand slowly returns, some first-tier solar firms have been resuming planned capacity expansion while other still hold reservations.

Many new solar firms in Taiwan have not yet delayed expansion plans due to strong ambitions and small capacity to begin with.

China-based solar firms continue with capacity expansion plans even when the market condition was weak. Many firms have been negotiating with equipment manufacturers in hope to achieve cost-downs.

Friday, July 1, 2011

Global PV module inventories to end 2Q11 at 8.6 GW, says Solarbuzz

Global PV module inventories to end 2Q11 at 8.6 GW, says Solarbuzz

Weak European photovoltaic (PV) market demand in the first half of 2011 caused global solar module inventories to soar at the end of second quarter 2011, according to Solarbuzz.
Initial estimates from Solarbuzz show that second quarter shipments fell by 22% on quarter compared to the increase of 12% projected by manufacturers during the quarter. Even with demand rising 79% on quarter and production falling an estimated 20%, quarterly cell and module inventories still increased by 559 MW. Inventories are now forecast to reach a record 8.6 GW by the end of second quarter 2011, with upstream inventories showing a sharp 36% increase over the quarter, in contrast to a small reduction in the downstream. This excess supply caused factory-gate module prices to drop by 9% in Europe in second quarter and 16% since the start of the year.
"Recent price reductions from tier 2 Asian manufacturers will place enormous pressure on others to follow suit," said Craig Stevens, president of Solarbuzz. "Even with significant cutbacks in production and shipments, fourth quarter factory-gate module prices are still projected to fall 25% on year."
The PV industry is braced for a challenging second half of 2011. PV manufacturers' bullish stance that sustained production and shipments will grow to reach supply levels that are 1.4-1.7 times larger than 2010 contrasts with the forecast that the end-market will grow only 5%. The revised global PV market size of 19.3 GW for 2010 is now projected to increase to just 20.3 GW in 2011.
Many producers now anticipate that lower prices will generate the demand increment in second half of 2011. However, chances for that depend on downstream inventories falling fast and on resolving the policy uncertainties in Europe that have characterized first half of 2011. Rather than further procurement, most downstream companies are currently focused on reducing inventories in order to avoid write-offs emanating from the collapse in prices.
"Maintaining an accurate and timely picture of both company shipments and the global balance of supply and demand in the industry will be key to ensuring inventories are managed effectively over the second half of the year," added Stevens.

Taiwan solar wafer makers under pressure to hike quotes

Taiwan solar wafer makers under pressure to hike quotes

Taiwan-based solar-grade crystalline silicon wafer makers have asked South Korea-based OCI to lower polycrystalline silicon prices to below US$50/kg but the latter is sticking to US$50/kg as its July contract price, according to industry sources. The makers are most likely to raise their quotes in July as US$50/kg is equivalent to a break-even price of US$2.30-2.40 per 6-inch wafer, but prices for such wafers have dropped to US$2 causing them to suffer operating losses for a while, the sources pointed out.
According to solar wafer makers, final negotiations with polysilicon firms will take place this week. If the material suppliers continue to stick to the current quotation, solar wafer firms may likely choose other suppliers with more competitive prices.
Industry sources indicated increases in the quotations of solar wafers seem inevitable, especially when orders from solar cell makers have been reviving. The sources added solar wafer firms hope negotiations with polysilicon suppliers will result in fruitful solutions as increasing quotations of solar wafers is their last option. The expected return of demand is likely to increase capacity utilizations of wafer firms to 80%, the sources pointed out.
Solar wafer shortages occured in 2010 when demand was at its peak. Price remained high throughout 2010 and contributed to outstanding financial performances.
The price of solar wafers decreased 40% on quarter due to low demand in second quarter 2011.


My Take:
The pain is spreading, the players from asia are looking at a -30% GM and are in trouble. This is classic for asian players in commodity markets, drive capacity up and export like crazy, then capacity is overbuilt and the market inplodes. We have seen this over and over and it never changes, now that the EU is starting to realize that they have subsidized this they are changing the FIT's to favor domestic content and the asians are in trouble because of this and they are beginning to see it.

Wafer price trend is strong indicator of solar market conditions

Wafer price trend is strong indicator of solar market conditions

The price trend of solar wafers will be an important indicator of the market recovery, according to industry sources, as the price of solar wafers is highly related to the capacity utilization of solar cell firms.
From 2010, solar wafer makers have been slower in capacity expansion than upstream polysilicon suppliers and downstream cell firms. The slow expansion has been causing shortages pushing prices to increase during boom times. At the end of first quarter 2011, when cell makers began to feel the rapid price falls, the wafer firms were still profting from the high and stable prices.
Solar wafer makers finally felt the freezing demand in second quarter. As the price of polysilicon has been relatively rigid, many wafer firms increased their OEM businesses to avoid the increasing costs.
Taiwan-based solar wafer firms Green Energy Technology (GET) and Sino-American Silicon (SAS) both increased the percentage of OEM for 2011. The possible increase of quotes for solar wafers will depend on the on-going negotiations between wafer firms and polysilicon suppliers.
 
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