Oversupply Concerns and Continuous Price Drops Cloud Over The Solar Market

As oversupply concerns and continuous price drops cloud over the solar market, some firms believe the time for grid parity will arrive soon. However, the market condition before the arrival of grid parity will be disrupted. Comparing with 2010, solar firms in 2011 have been walking on egg shells. Many upstream polysilicon providers continue to make profits but downstream firms have been experiencing shrinking demand coupled with falling prices. Solar wafer firms have been sandwiched between rigid polysilicon and crumbling product prices. Downstream solar cell firms have been feeling tremendous pressure as well. Solar cell makers have been facing falling prices and increasing demand for higher conversion efficiency from customers. To cope with the situation, many firms have been lowering capacity utilization to lower costs. Unable to compete with China-based module firms, Europe-based module makers have been practicing strict control over inventories. System firms have not yet been hit as hard by the low demand because the costs of procurement have been falling continuously. However, lending regulations have been growing tight due to weak economic conditions, hence difficulties to obtain loans have been increasing. Source: www.digitimes.com