Warning: Solar PV Shakeup Ahead

Greentech Media has a great piece on the winners and losers of Solar PV in 2009. They’re predicting an industry shakeout, with only 5.5GWdc of PV demand and over 14GW of PV supply. So where does that other 8.5GW of supply go? Probably out of business, or at least be hard up for more funding until we can ride out this economic recession.

Even with FirstSolar recently announcing production costs below $1/W, there are still many other companies that haven’t yet managed to hit that price point.

[B]y the end of 2009, year-end cell capacity will stand at a staggering 17.6 gigawatts. When taking into account production and capacity ramp rates, this is enough to produce almost 14 gigawatts of modules. By contrast, we estimate demand for 2009 to be only 5.5 gigawatts.

The analysis breaks up the solar industry into three groups: those that make it, those that wont, and the ones in the middle.

SunPower vs First Solar 2009 (Google Finance)

Vertically integrated companies and thin-film CdTe panels make up the first group, and they’re pretty much assured of making it through. How well they get through is a different story – looking at the stock price for SunPower (SPWRA) and FirstSolar (FSLR) you can see that SunPower is down 20% and FirstSolar is up over 40%.

Other companies, those using exotic and inefficient $/W designs are in line to fail unless they can have the cash to survive some very rough quarters.

Finally, the group in the middle is those with promising but not yet proven technologies that are working to lower $/W. They are headed towards either buyouts if they have decent technology worth acquiring, or closing up shop.

The only real flaw I find with the analysis is that the ranking of companies is based on the $/W module price. Some types of panels have higher installation costs per watt, and whether or not the system is one-axis tracking, annual kWh/panel, etc. All of these factor into the final ROI. But it is still the most comprehensive analysis I’ve seen.