A general view shows a "solucar" solar park in Sanlucar La Mayor, near Seville, Nov. 6, 2008. In September 2008, the Spanish government decided to decrease its solar power subsidy, a decision that wiped out nearly 40 percent of the worldwide demand for solar cells and modules. (Marcelo del Pozo/Reuters)
The future of solar power
A steep decline in demand and prices could move production to Asia and away from more expensive German manufacturers.
SAN FRANCISCO — Solar cell manufacturers worldwide are currently suffering from the collapse of a bubble that was pricked by the sudden reduction of a government subsidy in Spain.
The result has been a global slump in demand and prices that could help low-cost producers in China and Taiwan take market share away from higher-cost German manufacturers, industry analysts say.
“The situation is ugly for all the producers, but the Germans are being hit especially hard by what has happened to the market because of the conditions in Spain,” said analyst Stefan de Haan with the Munich office of the market research firm iSuppli.
For several years Spain had offered such generous subsidies for solar power installations that the country had become the world's single largest market for solar modules. De Haan estimates that of the 5.4 gigawatts of solar power installed worldwide in 2008, about 2.6 gigawatts went to Spain.
But in September 2008 the Spanish government decided that it could only afford to subsidize 500 megawatts of solar power in 2009, a decision that wiped out nearly 40 percent of the worldwide demand for solar cells and modules. “Orders dried up, inventory began to accumulate and manufacturers began to cut prices almost to the level of costs,” said de Haan, who projects that worldwide solar power installations will fall to roughly four gigawatts in 2009 as a result of the new Spanish policy.
The collapse in demand is likely to shift market share among the world's leading producers, he said.
In 2008, China was the world leader, producing 26 percent of all solar cells, followed by Germany and Japan tied with 18 percent each, and North America at 15 percent, de Haan said. Taiwan accounted for 13 percent of global production in 2008, while the rest of Europe, excluding Germany, accounted for 7 percent, with the remaining 3 percent scattered among the rest of the world, he said.
Industry analyst Paul Maycock, with PV Energy Systems, Inc. in Williamsburg, Virginia, said new factories in China and Taiwan opened just as the change in Spanish policy caused demand to collapse.
“We had this double whammy, with more production coming on line at a time when there was suddenly no place for the product to go,” said Maycock, who has tracked what happened to prices as a result.
It stands to reason that China will take over production of solar cells. Like everything else.
PVinsights, pvinsights.com, think that solar cell makers all have a serious trobule that they signed lots of long term solar wafer contracts with high contract prices. These long term contract prices made all solar cell makers in serious trobule, including Taiwanese and Chinese solar cell makers. Of course, manufacturing cost is very important to solar cell companies.
Recent on Technology:
Can Toyota Digg its way out of recall crisis?
Thomas Mucha - Commerce - February 7, 2010 09:07 ET
The reeling Japanese automaker turns from old school PR to new media.
On Location: Shoul, Morocco — On the organic food frontier
Solana Pyne and Erik German - Morocco - February 5, 2010 06:55 ET
Saudi women revel in online lives
Caryle Murphy - Saudi Arabia - February 4, 2010 06:34 ET
Internet gives Saudi women a rare outlet for social interaction.
Mexico considers clamping down on Twitter
Michael E. Miller - Mexico - February 2, 2010 06:58 ET
Mexicans are using Twitter to avoid drunk-driving checkpoints. Drug cartels might be using it too. Does that justify restricting social networking sites?
Mac Rumor Alert: What Apple's "iTablet" could mean for Asia
Jonathan Adams - China and its neighbors - January 27, 2010 09:48 ET
Here's the latest chatter about the supply chain of the coming Apple gadget — if it really exists.
.jpg)
Apple news: Workers' rights the focus again
Kathleen E. McLaughlin - Commerce - January 26, 2010 12:18 ET
Another flare-up hits a Chinese high-tech factory.
China v. Google: Beijing fights back
Kathleen E. McLaughlin - China and its neighbors - January 25, 2010 20:14 ET
The Chinese government takes a swing at Hillary Clinton. How bad can this get?
Facebook, Orkut and the caste system
Hanna Ingber Win - India - January 21, 2010 06:53 ET
Ancient, meet the modern. How are India's complex social interactions playing out across social media?
Europe's airport security dilemma
Teri Schultz - European Union - January 20, 2010 21:42 ET
Body scanners: You'll see them at US airports. But whether European airports will have them is up in the air.
The secret behind "Avatar" and Twilight's "New Moon"
Jason Overdorf - Commerce - January 12, 2010 06:36 ET
Can you hear the Indian accent behind Hollywood's biggest hits?
Liberia struggles to get online
Myles Estey - Africa - January 11, 2010 06:33 ET
Lack of fiber optic connection to rest of world is a major hurdle for war-torn country.
Will a robot be the next great humanitarian?
William Dowell - NGOs - January 7, 2010 12:02 ET
Experts see humanitarian applications for the next generation of robots.
"Witch hunting" on the web. The latest Korean fad?
Jiyeon Lee - South Korea - January 7, 2010 11:37 ET
The most wired country in the world has always been on the forefront of internet trends. Now, they're on the cusp of cyber-violence.
Looking through Galileo's eyes
Nicole Martinelli - Italy - January 3, 2010 15:04 ET
Modern astronomers marvel at what Galileo Galilei discovered with his 17th-century telescope.
Opinion: The Avatar Decade
Susan E. Reed - Worldview - January 2, 2010 10:41 ET
Watch as the world "avatars," as spheres of politics and big business make way for creativity, science and people power.
Rwanda bids to become East Africa's WiFi hotspot
Eamon Kircher-Allen - Africa - December 30, 2009 14:06 ET
If all you know about Rwanda is gorillas and genocide, think again. The tiny country is gearing up to become East Africa’s tech capital.
Holiday shopping: The next big thing in Taiwan?
Jonathan Adams - China and its neighbors - December 23, 2009 06:59 ET
A look behind the booming business of e-books. It's a page turner.
Electric Japan: Can politicians save the electronics industry?
Chana R. Schoenberger - Japan - December 22, 2009 09:33 ET
Their next target: Latin America.
.jpg)
Electric Japan: A yen for digital TV
Chana R. Schoenberger - Japan - December 21, 2009 06:35 ET
Are Japanese companies set to make a killing?
Climate change: Forget Copenhagen. What about Kuzumaki?
Justin McCurry - Japan - December 19, 2009 09:03 ET
Japan launches a bold green energy experiment. It might even work.
Watch GlobalPost videos:
Reporter's Notebook
The non-profit group that helps hold the internet together by overseeing the domain name system has faced the diplomatic problem of loosening,...Read more >
France's Constitutional Council has struck down the most onerous provision of a new law meant to combat digital copyright violations by ruling that...Read more >
I took off today to celebrate my wife's birthday which coincides with the inauguration of Barack Obama. We watched together this morning in one of...Read more >
Featured: Special Projects
Oceans:
Assessing their health
After the Fall:
20 years since the Berlin Wall came down
Life, Death and the Taliban:
Videos and stories
Study Abroad:
Students report from the road
Living in the Shadows:
An intimate look at China's migrant workers
A World of Trouble:
The global economy in 20 hotspots
Comments:
2 Comments.
Login or Register to post comments