There will be blood: Solar shakeout expected to slash solar makers by 70%

Photo by Katie Fehrenbacher/Gigaom

Get ready for an ugly 2013 for solar makers. According to a report from IMS Research, the number of companies that make solar equipment — the wafers, cells, panels, and accompanying hardware — will be slashed from 500 companies in 2012, to 150 in 2013. That’s a reduction of a whopping 70 percent.

The trend has been happening for a couple years now. The number of solar maker companies in 2010 was 750, and 650 in 2011 (see chart below). A lot of the consolidation will happen for firms in China. In particular, companies that manufacturer polysilicon-based solar ingots, wafers and cells, will be under immense pressure. Mike Sheppard, senior photovoltaics analyst with IHS, says:

Most upstream PV supply operations will simply cease to exist, rather than being acquired by other companies. Most of these suppliers actually have already stopped production—and will never restart.”

The problem is one of a massive oversupply that has grown over the years, as prices of silicon and solar panels have dropped dramatically, and demand hasn’t grown as fast as supply. A lot of the solar maker companies are operating at a loss.

IMS Research

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