Solar Manufacturing Flees the US
SolarTown is just up the street from a local independent sporting goods store, which moved in when this area was just making a comeback from years of neglect. The service is good, the product selection is good and the prices are right. These factors should make the store a fixture in the community, but three months ago, a sporting goods chain moved in just a block away at DC USA, the largest retail complex in Washington, DC.
The prices for the chain store may be slightly better, but even more than the prices, the location is much better. The small independent store saw its revenue drop by over a half in three months, and as you can see from the picture at the right, it is now going out of business. Oh, how in just a few months, the fortunes of this small store changed.
So has been the effect of the tsunami of Chinese manufacturing on the solar industry. In just a couple of years, the Chinese ramped up production, lowered prices and swamped the US and other markets. We have seen a veritable who’s who in the solar module manufacturing market close their doors or cut back production in the US. Take a look at our solar news stories for more details. BP Solar, Evergreen, Solon Solar all could not compete with the Chinese low cost manufacturers.
German manufacturer SolarWorld is also cutting back production in the US, citing the “war” with the Chinese solar companies. The war may continue abroad, but for all intents and purposes the war for solar manufacturing in the US, at least in crystalline silicon, is all but over.
We are still looking forward to innovations that may change the face of solar manufacturing, but we’re glad that it was not our $1.5 billion investment that went down the tubes with Solyndra last week. Solyndra was not the only solar manufacturer to fail to foresee just how precipitous a drop in prices there would be this year and the significant effect it would have on its business model.
We still don’t know what the FBI found in Solyndra’s offices yesterday, and if Solyndra was hiding from the government and its investors significant financial information, then there may be some significant consequences–not only to the company which already is in bankruptcy, but also to the company’s executives.
Just as the sporting goods down the street shows, the solar market is dynamic and changing rapidly. Companies that are not nimble enough to keep up won’t make the cut. Market watchers are predicting that installations of PV systems and solar panels may double in the second half of the year, because of the rapidly falling prices of solar modules, incentives in new markets and an increase in activity as developers try to commence projects before end-of-year cuts in economic incentives.
We are sorry to see that Solyndra and the other solar manufacturers in the US will not be here to soak up the demand.