Siemens Solar’s run rate for 2001 will be approximately 40 MWp, up from last year’s ship- ments of 30 MWp. This represents an increase in crystalline production as well as an increased target (300 kWp) for thin film.

 The new production line (May 2001) announced at Sharp’s Shinjo, Japan, plant will take production from a planned (2001) 54 MWp to 94 MWp. This almost doubles the number of modules that Sharp will produce at its largest single PV production facility. Sharp manufactures both single-crystalline and polycrystalline cells.

Kyocera has also announced a 60-MWp production capacity in comparison to a previous run rate of 42 MWp in 2000. All of Kyocera’s cell production is polycrystalline.

 This increase in production is particularly important to the building industry. It needs to have confidence in the long-term ability of the manufacturers to build to a capacity that will support not only current projects, but also further expansion.

For purchase information please contact Paula Mints, SPV Market Research: paulamspv@yahoo.com, or Tim Carli, Strategies Unlimited, tcarli@strategies-u.com

Notes from the Solar Underground: The Vertiginous Nature of Solar’s Identity Crisis

The photovoltaic industry remains committed to the story that it will be the cheapest energy source available – less expensive than fossil fuels and able to leap nuclear power in a single bound. The concept of grid parity has been a driving force in the industry for so long that for the industry to divorce itself from this goal would be akin to breaking its word. You can perhaps be forgiven, after all, for taking longer than expected to reach a goal, but perhaps not so easily forgiven for setting a goal that had little logical basis in the first place.

The history is well-known, the German FiT proved a highly profitable and seductive instrument for investors, leading to a highly profitable period in the solar industry as well as the beginning of multi-megawatt (utility scale) installations. This period coincided with a shortage of polysilicon, and thus crystalline PV modules. High demand and raw material constraints led to escalating prices for PV modules (even thin film modules), which in turn led to concerns about the price of solar. 

Grid parity has always been a better slogan than a goal particularly as it ignores the direct and indirect subsidies enjoyed by conventional energy.  Even the banking industry, architects of the financial crisis that led to a global recession in the late 2000s, enjoys direct and indirect subsidies.  Nonetheless, the PV industry has a reputation of developing an expensive technology with a too-long return-on-investment profile. No one (or very few) ever bought an expensive car with return-on-investment in mind.

The PV industry has been apologizing for so long for being expensive that it forgot, or was insecure about, its value proposition: A DG PV system is a high quality, reliable, long-lived source of electricity with low O&M that provides energy independence to its owner or owners. 

PV manufacturers lost money in 2012. Those that did not fail were forced to curb costs, which, in an industry that relies on R&D and innovation is a disaster.  Expectations for too rapid commercialization led to the failure of several startups and even long term participants.  Below cost prices for modules were defended until the facts made it impossible to deny the mark downs and then were defended as necessary for continued high levels of deployment.

High levels of deployment have cost the PV industry dearly in terms of quality control and innovation.  In an industry that relies on ongoing research and innovation and that hopes, no needs, to inspire innovation in the next generation of scientists and engineers, starving the innovative process is close to a crime.

Nonetheless, you can’t keep a good industry down. Innovation continues, startups are percolating and somewhere out there an idea or innovation (business or technology) is looking for funding.  Now is the time for the industry to return to its quality roots and this includes allowing manufacturers to earn sufficient margin to encourage on going innovation and a focus on quality. 

Quality, by the way, is not a minimum standard; it is a commitment to constant improvement that accepts no compromises.

MOUNTAIN VIEW, CA, April 23, 2013 (Press Release) — Since 1974, over 90-Gigawatts of photovoltaic cells and modules have been shipped, on track to ship 300-Gigawatts by 2016.  SPV Market Research, a solar market research firm, and Strategies Unlimited, a leading technology market research firm,  have released the annual report, Manufacturer Shipments, Capacity and Pricing 2012/2013.  Cell and module shipments for crystalline and thin film technologies increased by 10% in 2012 over 2011, while capacity to manufacture technology increased by 4% under the combined effects of idled capacity, cancelled plans and company failures.  Cell and module revenues decreased in 2012 over 2011 by 37%.  Average selling prices for modules decreased by 43% in 2012, from $1.37/Wp in 2011 to $0.78/Wp in 2012, with prices for inventory re-sales averaging $0.60/Wp.

“High levels of inventory, over capacity and expectations of lower prices continue to hold prices down into 2013, though there is some evidence that price declines have stalled at least temporarily,” said report author Paula Mints, SPV Market Research. “The pricing situation is complicated and is effected by many factors, including continued aggressive pricing.  We are seeing a broadening of the market into Latin America and North Africa, along with continued demand despite lower incentive rates and political upheaval in some countries.”

Manufacturer Shipments, Capacity and Pricing 2012/2013 provides an in depth analysis of the supply side of the photovoltaic market by region, manufacturer and technology as well as a technology forecast to 2017 for crystalline and thin film technologies.  “Despite failures of thin film manufactures due to the highly competitive pricing environment, development continues for thin films,” said report author Paula Mints.  “The industry consolidation is certainly not complete nor is the struggle to identify business models that would support a return to profitability for manufacturers.”

For more information on report availability and pricing please contact Tim Carli, Sales Manager, at +1 650 946-3163 (voice) or e-mail at tcarli@strategies-u.com, Paula Mints at paulamspv@yahoo.com, or check the Strategies Unlimited web site http://www.strategies-u.com

In 2012, the weighted average operating margin for the top ten PV manufacturers (in terms of shipped product) was -19% and the weighted average gross loss was $35.5-million.  This means that the industry’s pricing behavior is unhealthy and the way in which the business are run over and above price strategy is also unhealthy.

It is a useful exercise to consider the effect of low prices on an industry’s viability. The significant growth that the photovoltaic industry has experienced since the mid-2000s was stimulated by generous feed-in-tariff rates.  This incentive was widely misunderstood as it was believed that it would last in perpetuity and be immune to retroactive changes.  The concept of achieving grid parity with conventional energy is another fallacy effecting pricing strategy for the photovoltaic industry as the concept ignores the fact that conventional energy enjoys direct and indirect substitutes and will continue to enjoy these
subsidies for the foreseeable future. The effect of inventory on the demand
side is another factor limiting manufacturer’s choices in terms of pricing as
are expectations that prices will continue to decline. There is no other
industry where prices are expected to decline consistently over time. Another fallacy
about price declines is that volume will ameliorate the effect of low margins. Finally,
the market for solar based as it is on unsustainable cell and module prices is
not sustainable.  

1)    Shipping product fully expecting it to be returned so that it can be counted as a monthly or quarterly sale

2)    Shipping product to a subsidiary so that it can be counted as a monthly or quarterly sale

3)    Substituting production numbers for shipment numbers, a practice that obscures outsourcing and true shipment numbers

4)    Encouraging early payments (or pre payments) to make one quarter or month look as if sales are picking up

5)    Using misleading language to suggest progress such as implying champion or pilot scale product is in commercial production

6)    Selling common sense and/or false hope at a high margin

7)    Selling false hope at all

8)    Forgetting that teams are made up of individuals

9)    Supporting only the ideas of the loudest person in the room while clamping down on logic

10) Rationalizing any or all of the above as a) the ends justify the means b) everyone is doing it and so it is common business practice or the only way to compete

Viewing the solar industry (and all of its technologies) from the outside an observer would be confronted by two distinct viewpoints.  Viewpoint number one: THIS IS THE GREATEST TIME IN THE WORLD FOR SOLAR. GROWTH IS OFF OF THE CHARTS. THIS IS THE BEST YEAR YET.  Viewpoint number two: This is the worst time for manufacturers of photovoltaic technology.  Enter at your own risk and consider failure the likely outcome.

Unfortunately these viewpoints are both true and untrue depending on the prism of the vested interest involved. Currently solar industry participants (particularly those involved in PV) are lined up behind these two viewpoints.  It is time to all line up together behind a common cause – battling entrenched and well-funded (including subsidies) conventional energy and unseating it to become the primary source of electricity globally, and make money doing it. When a solar system is installed planet earth and all of its inhabitants benefit whether or not they actually paid for the system installation. 

1. As PV (and other solar technology) manufacturing pioneers continue dropping by the wayside it is time to STOP saying that this consolidation is healthy and start figuring out how to jump start a healthy recovery
2. There are about a million examples that disprove the cliché THE ENDS JUSTIFY THE MEANS, so, let’s stop saying it.
3. For goodness sake in a healthy industry everyone along the value chain needs to maximize utility – this means all players need to make money, save money and be able to justify the sale or purchase.  The time is long past when manufacturers of PV technology can justify losing money on such a massive basis.
4. On the subject of money, the money losses of PV manufacturers are catastrophic and here is the primary reason why this is so – the loss of innovation (meaning low investment in R&D) will slow progress in this industry for the near-term, perhaps even the mid-term, but because of the innovative soul of the solar industry likely not the long-term.
5. Moore’s law (about the doubling of transistors on integrated circuits over a period of time) is not a good match for decreasing costs of PV manufacturing.  PV is an industry filled with researchers, scientists, engineers – innovators all – can’t we come up with our own law?  Here is an idea, give an award to the student who develops a thesis (and proves it) that actually fits solar industry cost declines.  Hint: it will take time, research and money and it is worth it.
6. And on the subject of poor analogies – just because the PV industry uses semiconductor technology does not mean its behavior is synonymous with the semiconductor industry. Please reread number 5.
7. Nor is a-Si (amorphous silicon) and tandem junction a-Si or micromorph manufacturing synonymous with the LCD industry manufacturing. A thin film panel is not a television.  Please reread numbers 5 and 6.
8. Whether upstream or downstream, and no matter the location, we are all in this fight together.  Time to join up on a global solar strategy.
9. Cynicism should be out, let pragmatic optimism reign.
10. Bias is almost always a thought killer; take in all the data and information and approach problems cleanly without a foregone conclusion or something you are trying to prove.
11. No more killing off technologies (crystalline in the past, thin films now); there is an application for all solar technologies.
12. Stop thinking that a brand new, game changing technology will be discovered tomorrow – the entire PV industry (and CPV and CSP) is already made up of game changing technologies.
13. Stop looking for the brand new, savior application that will result in a sustainable (without subsidies) market for PV (CPV and CSP) – micro-grids, for example, have been around for decades. 
14. Stop looking for the emerging market that will solve the solar industry’s problems either with or without subsidies.  Markets are opening up now because the low price of modules has enabled lower system costs and these same prices are killing off PV (and CPV and CSP) manufacturing.  These same markets will turn bad for system integrators, solar developers and EPC when the PPA and tender bidding becomes too low to support a quality or, profitable installation.
15. Stop thinking that PV technology manufacturing (the cell, whether thin film or crystalline) should naturally be in China or other parts of Asia because they do it better – or, before reaching this conclusion, take a look at the current financial statements for manufacturers. Basically, there is no logic to concluding that one region or country should be the manufacturing or innovation center for solar. Think of all the young dreams and future innovation that is lost by discouraging manufacturing in Europe, the US and other regions and countries.
16. Stop banging the grid parity drum it is drowning out common sense.
17. Take a look at all the PV manufacturing top ten lists and, as all the manufacturers had negative net incomes in 2012, ask yourself who on earth would want to be on these lists.
18. As the RPS standards in the US near fulfillment push either for extensions or prepare for a fight.
19. One PV industry message to potential residential and commercial customers used to be energy independence – the joy of seeing the meter spin backwards and the thrill of zeroing out an energy bill.  This is being supplanted by: It is irresponsible to zero out an electricity bill because the utility needs to make money.  The follow on to this is that of COURSE system owners should be glad to pay a fee not to be taken off line. The fact is that in an emergency we can all be taken off line. Read your utility bill fine print.
20. No more winners and losers, every time a solar participant fails something vital is lost.
21. Some business is not worth doing, examples: unprofitable business done just to plant a megawatt in the ground or to serve the latest fad.
22. PV is the best distributed generation technology – take it back to the community and find ways to make this work. The closer solar gets to the community the more involvement is created and the greater the chance of a grass roots movement building momentum.
23. Financing (zero or low interest) remains the biggest roadblock to residential DG PV growth and the solar lease is not a panacea to this – let’s find a way for potential solar system customers (whether or not they rent their home) to afford PV system ownership – this means engaging landlords and other stakeholders.  The foreclosure crisis in the US and other places has allowed conglomerates to gobble up homes and become landlords.  This is unfortunate but does not mean that these new landlords cannot be encouraged to install PV systems for the good of their renters (lower utility bills) and for the good of the air we breathe. 
24. There are no winners in trade wars and no country is a 100% good actor in terms of winning unfair industry battles.  Let’s work together as an industry to create our own standards and keep solar a global manufacturing and deployment industry – YES we say this all of the time. Let’s do it.
25. It is currently in vogue to admit that conventional industry has unfair subsidies while also throwing up our collective and figurative hands and stating that there is nothing we can do about it – sure there is, and there is safety in numbers. Let’s get together as a whole and fight.

Article Written in 2012

The photovoltaic industry is currently in a state of extreme contraction brought about by overbuilding, which was brought about by the belief that the feed-in-tariff incentive model would continue expanding also transferring from region to region, which was exacerbated by decades of fighting for profits and incentives in a world that largely considered the PV industry either a science experiment or the lifestyle choice of hippies.  The current infighting has made enemies of colleagues.  Artificially low prices have encouraged the governments to believe that enough progress has been made, and that incentives were no longer required.

            Since the beginning of photovoltaic industry time participants have had to fight for every incentive dollar.  The term grid parity has been used as almost a promissory note towards the end of achieving continued incentives.  That is, a promise was made by the solar industry and all of its participants that the cost/price of installing a PV system would decrease at an aggressive rate to the point that the electricity generated would be at parity with other electricity generating technologies. One of the assumptions used in this regard was that the cost/price of conventional energy would continue to rise.  This assumption ignores the volatile pattern of pricing behavior for any good, while also assuming that the cost of manufacturing solar technology would follow a more or less smooth downward slope.

 The promise of grid parity also ignores (or, at least looks the other way) the fact that during most of its incentive driven history, the cost of manufacturing a solar panel and its selling price have been disconnected.  One reason for this disconnect between cost and price is that for most of its history there has not been significant pull (the term to describe when buyers pursue a product).  The promise of grid parity and the goals that have been set up in its name also ignores the fact that at every point in the chain all participants must enjoy a margin comfortable enough to conduct R&D, pay employees, expand, develop products and, in short, conduct business in the global market place. The solar industry, in sum, has promised itself into a precarious state where margins are memories and company failure is accepted instead of mourned. 

In 2009, at the height of the feed in tariff era, the average selling price (ASP) for PV modules decreased by 33% over the previous year, from and ASP of $3.25/Wp in 2008 to an ASP of $2.18/Wp.  The price of cells decreased 61% from $3.20/Wp in 2008 to $1.26/Wp in 2009.  Though a one year decrease in prices of >30% for modules and 61% for cells cannot be considered normal progress, and though this price correction was driven almost entirely by aggressive pricing, it was proclaimed a great achievement and absolute proof of progress.  This progress has continued through to the current period, Q4 2012, and is continuing to drive technology manufacturers into bankruptcy.  If this is progress, a healthy period of stagnation would be preferred. 

            Grid parity is a concept with many definitions.  Grid parity is also a marketing term and is an unhealthy goal as it pits solar in a battle for energy share with conventional energy, which will continue to enjoy healthy subsidies.  Prices are currently held down by high levels of inventory (which is being resold) and the expectation of low prices springing primarily from rumor.           

Despite it all, Solar Will Survive

            The solar industry, and all of its technologies including CSP and CPV, is currently facing challenges and this painful period will continue for some time to come.  The current contraction is complicated by a trade dispute in the US and discussions of a trade dispute in the European Union. A slowing global economy complicates recovery for an industry that needs significant investment on the manufacturing and installation sides of the solar value chain. Decreasing incentives are further straining margins and the new incentive paradigm, PPA and tender bidding, does not support the true value of solar.  Business models, including the US lease model, need maturing.

            It is a good thing that a) innovation thrives in times of hardship and b) the solar industry has significant experience with hardship.  Over its ~40 year history, industry participants have continued to innovate – technology development, system design, balance of systems components – all the while fighting governments for continued incentives and a complacent energy buying public.  Moving forward, technology innovation will continue.  Right now it is crucial to develop business models that allow for healthy margins and provide value to customers.  Along with business model development an educational effort must be undertaken by the industry.  Energy buyers need to learn the details about the subsidies that conventional energy continues to enjoy so that they can make clear choices based on facts.  Forget LCOE for a while and focus on data – facts – about the true, unsubsidized cost of conventional energy and yes, nuclear. 

            True facts about costs are important and so is a solid effort to change the conversation from cheap to quality.  Solar does not have to be the cheapest electricity choice. It needs to be recognized as a high quality, reliable, long lived energy technology.  Once a solar electric system is installed the fuel (sun) is free. 

            Distributed generation (DG) solar – power at the point of need – involves individuals and communities in their energy future, offering all stakeholders energy independence. As storage technologies mature and become more economical the value that energy independence offers will be clear. 

This is a manifesto, and it is personal.  Candidly, it is strategic vision for people in solar, not just women.  Solar is a young industry and we need to foment expertise of many people in order to overcome all the obstacles still in front of us – all of us are part of the future. That aside, women have a lot in common with the solar industry simply because of the struggles that women have gone through in some cases, just to survive. 

The message is simple:  find what you love, do what you love, take risks, be fearless, overcome the obstacles placed in front of you, and do not give up if the obstacles overcome you.

Women in business have trod a long hard road, but, the road for women of all ages and circumstances has been hard.  Consider that in 1872, Susan B. Anthony was prosecuted for illegally voting. In July 1878, Wyoming, where women had the right to vote, was admitted as a state and that same year a constitutional amendment, (which did not pass for over 40 years) was introduced stating, “the right of citizens to vote shall not be abridged by the United States or by any State on account of sex.” Women finally won the right to vote in 1920.  Perseverance is key – it has been key for the solar industry for almost 40 years and it has been key for women for a lot longer.

In business women are still in the minority in terms of executive leadership. In the U.S., women are underrepresented politically.   In 1998, my first year in solar, there were very few women in solar.  Since that time, representation in the solar ranks by women has risen along with the megawatts installed – but, comparatively speaking, we are not at gigawatt level in terms of representation yet.

We – as women – have a lot in common with the solar industry. We have struggled in obscurity, been underappreciated, underused, and under-supported. We forget that the opportunities we have now, though challenges remain, are available to us because so many others before us fought hard for their own right to thrive, to succeed – or just to try, fail and then try, try again. We are lucky to be part of an industry that was forged on struggle and where so many battles remain.  The solar industry is at the beginning – still young, still so much to prove.  We, as women, are part of solar’s future and the solar story will be ours too. We are the future CEOs, scientists, engineers, writers, business developers, analysts, and system integrators – as women the trials, tribulations and hard won successes of those before us are part of our DNA. In the U.S., there was a time when women could not own property and marriage was often a land deal –imagine that, and while imagining it, think of what struggles like these can teach solar.  We are teachers. 

Women have not always been supportive of each other in business – the obstacles have been daunting, and sometimes the helping hand offered by another woman is grudgingly given.  It is time to reach out freely – frankly, for our industry’s sake.  The solar industry has enjoyed amazing growth but a correction is coming and the talent that women have as survivors – it is in  our DNA – will be needed by the solar industry and soon.

The vision for women in solar is simple, we should be industry and company leaders and we should never forget the hard fight that all the women before us went through so that we could have opportunities – because the solar industry needs that visceral, gut memory.  We need to start companies and run companies.  We need to run companies that reflect the hard won successes we have achieved. Here are some suggestions for women who will run – or the people who will run – companies of the solar future:

1) Get experts to share expertise

2) Cut everything BUT people and do not over hire

3) Communicate openly, always about everything

4) Eliminate cliques — particularly upper management cliques

5) Eliminate titles — it is a work place not a kingdom

6) Pass out benefits and perks evenly — today’s junior staffer may be tomorrow’s industry leader

7) Foment and treasure passion and create an atmosphere where expertise and passion thrive

8) Be prepared — read, think and analyze — learn something every day

9) Be open to feedback and embrace bad news — use it

10) Make a friend of failure, it ain’t that bad, and it will point you in the right direction

11) Fear is part of it, face it, walk through it, and use it

12) Change simply for the sake of change is silly, real breakthroughs come through careful thorough analysis and hard work

13) A strong work ethic is crucial — exhausting though it may be

14) Have a clear vision and set appropriate goals and benchmarks to help you achieve it

15) Love what you are doing but find a market for it

16) And it is worth repeating … be passionate and a true believer in what you do