Top Ten Global Solar Trends for 2011

January 27, 2011Sectorby David Caploe

Top Ten Global Solar Trends for 2011

27 January 2011.

President Obama made a big deal of the economic potential for solar and other clean energy sources in his State of the Union speech this week,

about which, in principle at least, we could not be more enthusiastic.

But the picture is not quite as, er, sunny, as we certainly, and the President presumably, would like.

To be sure, 2010 was a boom year for the solar industry,

due largely to lucrative government subsidies in Europe, especially Germany and Italy.

New solar project installations shot up from 7.2 GW in 2009 to an estimated 15.8 GW in 2010, according to iSuppli.

But incentives in these key European markets are set to fall quite a bit,

so analysts are predicting slower growth in 2011.

At the same time, if Obama actually comes up with visionary programs, and is willing to put some muscle

into overcoming reactionary Republican rhetoric about cutting "gub'mint spending,"

the U.S. solar market could grow faster.

In this context, here are ten trends in the global solar energy industry

to which Obama, other Americans, and, indeed the rest of the world,

should be paying attention as 2011 unfolds.

1 – Doubling of the solar market in the US

Changes in legislation designed to give utilities incentives to create solar farms are expected to be a big driving factor in the growth of the solar energy market.

The US solar industry saw sales peaking last year following an up to 40 percent decrease in the price of solar panels in the later part of the year. An excess in supply from production during the financial crisis plays a big role in the price decrease.

According to some estimates, the US is expected to account for 25 percent of the world’s solar market by 2013, from 8 percent today.

2 – Investment in the solar industry

The 2008 recession caused many projects and deals to tank – and with investors now looking for new investments post- Wall Street collapse, the solar energy industry is attractive for profitable clean energy investments.

With utilities increasing the amount of solar powered electricity in the coming years, solar power has a strong long-term investment outlook.

And growth is expected in all areas of the solar power and renewable energy market.

3 – Solar in the home and office

Consumers, now more environmentally aware are taking up solar technology in their homes and offices. Increasingly, new homes built with solar energy systems are in demand.

Once deemed too costly, prices of solar panels are coming down as the technology and manufacturing becomes more wide-spread globally – and consumer confidence goes up as the benefits and long-term savings of using solar power are realized. It will still take a few years for solar technology to be truly affordable.

In addition to consumers taking up solar systems and technology, governments in the US, Australia and Europe are increasingly providing incentives and grants to encourage and boost the uptake of solar systems in the home and office.

4 – China leads solar cell supply

In the recent years, China has overtaken Japan and Germany in supply of solar modules. Today, the top ten solar producers, are Chinese firms.

How did they do it?

In 2009 China’s government started offering incentives for the installation of solar panels, in order to boost demand for its own solar manufacturers.

5 – M&A market in solar

Solar portfolio firms rely on a robust M&A pipeline – particularly for exits via IPO or acquisition, which have been few in this sector.

However, the $305 million acquisition of solar project developer Recurrent Energy by Sharp sends the signal that solar remains a viable venture capital investment.

6 – New market sectors

The microinverter is not a new idea but has not been able to gain traction in the last 10 years.

Enphase however has managed to take the inverter concept and convince the solar industry to adopt the technology. In 2010, Enphase shipped half a million units to date – their success has spawned competitors such as SolarBridge and Petra Solar.

7 – Integrated Photovoltaics

Building integrated photovoltaics (BIPV) has taken off since 2009.

Solar roof shingles in particular intrigued property owners with ease of installation - and lower cost, higher aesthetic than traditional PV panels. Market analysts expect Dow Chemical and Johns Manville to lead the way with sale of solar shingles and similar products.

8 – Solar project development

Some companies are getting into the solar project development business. Particularly in the fields of permitting, constructing and operating utility scale solar power fields.

This also provides them the opportunity to install their own solar panels and profit through selling solar electricity to utilities.

9 – Solar outsourcing

Solar manufacturers have started outsourcing production work, instead of owning factories in which all components are assembled. Companies such as BP Solar, SunPower and EvergreenSolar are among them.

10 – Diversification in the solar business

Some solar companies are revising their business plans, moving from manufacturing to licensing technology, and selling factory equipment to compete with solar cell makers.

To be sure, the most important of these will be the continuation and expansion of various forms of Federal subsidies.

So far, President Obama has been willing to extend himself only for already-established corporate interests like Wall Street and the insurance industry.

Perhaps, for once, he can put some muscle where his mouth is,

and offer some real help to a relatively NEW kid on the block - in this case, solar.

So far, his record isn't very promising.

But we'll be more than happy to be surprised -- for a change we actually COULD believe in.

David Caploe PhD





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