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2016 was a wild year and not just for solar and after decades of
reliance on government incentives, subsidies and mandates the
global solar industry may be inured to unpredictability but the
industry as a whole should be wary of global trends. Solar
PV expert Paula Mints looked at a number of the developments for
solar companies in the December edition of SPV Market Research’s Solar
Flare. Adapted for AltEnergyStocks.com, this series of
articles is reprinted with permission.
The high efficiency monocrystalline cell pioneer and manufacturer
began signaling its competitive struggle in early 2016 and over the
course of the year it shifted its focus from utility scale (a sector
in which it is not cost competitive) to rooftop deployment (a sector
in which it is still not cost competitive), shuttered module
assembly in the Philippines and laid off 1200 people, and acquired
JV partner AUO’s stake in the 800-MWp cell manufacturing facility in
Malaysia for $170-million paid over four years.
In December SunPower announced that it would shutter 700-MWp of its
cell capacity in the Philippines and lay off an additional 2500
people. The cuts were attributed to cost cutting measures. During an
interview with Reuters, SunPower’s CEO said: “We are planning for
(price) stability, meaning they won’t materially decrease or impair.
They might be plus or minus a few percent, maybe 5 percent, on a
high side 10 percent, so we expect stabilization, not necessarily
Translated the quote means that prices are un-competitively low and
we fervently hope that they will not continue to fall and though we
do not expect prices to increase and we frankly have no idea what
stabilization means at this point.
What it means for solar: As the robot said repeatedly on the
1960’s TV show Lost in Space: Danger Will Robinson. SunPower’s
struggles in 2016, and earlier, indicate that high quality may no
longer command a premium. As with First Solar, SunPower finds itself
in a situation where visibility into future market direction is
clear (price pressure will continue) and where an appropriate
strategy has yet to emerge.
As with First Solar (FSLR),
solar industry participants should hope that this industry pioneer
and respected high efficiency manufacturer rights the ship.
Paula Mints is founder of SPV Market Research, a
classic solar market research practice focused on gathering data
through primary research and providing analyses of the global
solar industry. You can find her on Twitter @PaulaMints1
and read her blog here
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