The Global Inventory of Solar Modules Is Estimated at 6-8GW

The global inventory of solar modules is estimated at 6-8GW currently, but modules which meet market-required energy conversion rates and bank-designated brands for lending are only 4.5GW or 56-75%, according to president Pan Wen-whe of Taiwan-based crystalline silicon solar cell maker Gintech Energy. Although global demand is around 20GW, total solar cell capacity has reached 50GW. The total capacity of firms that can produce products that fit the current pricing and conversion efficiencies is around 25GW, therefore, for the competitive firms, the oversupply problem is not as severe. However, this also means the excess capacity in the world is quite large. The dumping of low-price solar cells by hard for cash makers has affected average quotes, but the price-cut war will not last for long, according to Pan. In addition, the negative impact of the European financial crisis on the solar cell market will sooner or later disappear, Pan indicated. Consequently, the market will rebound at the end of the first-quarter 2012, Pan said. Gintech currently has a solar cell capacity around 1.5GW with capacity utilization rate above 90%. Pan noted the current investment rate of return (IRR) for solar PV systems is quite profitable. However, due to the financial crisis causing institutions to be conservative about lending, the profitable IRR has not been able to attract effective demand. Once the financial crisis is resolved in February-April 2012, the solar market can expect to see rebounds. Gintech reported net losses of NT$260 million (US$8.5 million) for the first three quarters of 2011, the losses were relatively small compared with those of its peers. Source: www.digitimes.com