Solar market imbalance to last through 2013,says Motech CEO Jackie Chang,DIGITIMES,Taipei[Thursday 10 May 2012]The solar industry has been suffering the current downturn for over a year and has not yet seen the end of the tunnel and market imbalance is likely to last through 2013,said PH Chang,president and CEO of Taiwan-based solar cell firm Motech.
Speaking at the Global MBA Forum Series at National Taiwan University(NTU),Chang delivered a speech that touched on the challenges and opportunities of the solar industry.Chang stated that the current downturn is going to lead to an industry shake-out which will help the market reach a new equilibrium of supply and demand."The IC industry went through the same thing,"said Chang.
Chang listed out some challenges for the solar industry such as establishing low-cost technological leadership,choosing between vertical integration and stand alone business models,optimizing resources,and managing supply chain volatility and long-term supply contracts.Chang emphasized the importance of cost control in an industry where products are priced per watt and can thus be viewed as commodities.Firms need to find ways to make good products with costs that are lower than competitors in order to win,added Chang.
The solar industry is also quite policy-driven,said Chang,but once the feed-in-tariffs(FITs)get cut,they will not increase again and therefore there is a drive in the industry to reach grid parity.For some countries with relatively higher electricity bills,solar power grid parity already exists,Chang stated.However,the oversupply problem is still ever-present,hence imbalance of the industry is likely to remain through 2013,added Chang.
There are opportunities for the solar industry despite the current downturn.Chang pointed out that depletion of traditional energy source such as crude oil and global warming are likely to boost demand for renewable energy sources.Furthermore,as solar technology improves,the industry will be able to produce products with higher conversion efficiency to suit demand.
Chang indicated that for the past year,no one in the industry has made any profits and this situation is likely to last for another year.Nevertheless,Chang stated that Motech's 1.6GW of capacity are all sold out for May-June.
PH Chang,Motech president and CEO speaks at the Global MBA Forum Series at NTUPhoto:Jackie Chang,Digitimes,May 2012
