According to Jifan Gao, CEO of Trina Solar, majority of solar equipment manufacturers may disappear in the next couple of years because of the decreasing prices that erode profit margins. This could drive the weaker companies out of the solar industry.
Trina Solar is the fifth largest solar panel supplier in the world that is based in China. Gao added that from the present until 2015 would be the first phase when around two-thirds of the solar manufacturers would not survive.
This year alone, three solar companies based in the United States have filed their bankruptcy, which include Solyndra LLC. A lot of companies, including Yingli Green Energy Holding Co. and First Solar, have cut sales and their margin forecasts. This is due to stiff competition and slower demand growth. Roth & Rau AG of Germany and SunPower Corp. agreed to mergers.
Gao founded Trina Solar in 1997. He predicted that around five companies could survive in each of the three manufacturing segments, which are ingots and wafers, photovoltaic solar panels, and raw material poly-silicon. First Solar and SunPower are two of the largest solar equipment manufacturers in the United States. They announced that they’ll reorganize after slashing their estimates.
Meyer Burger Technology, which is the largest manufacturer of solar factory equipment in Europe, said that it would delay its full takeover of Roth & Rau. The decision to postpone the takeover was made after Roth & Rau announced a warning yesterday that could cause Meyer Burger to take losses of up to $83 million compared to the takeover price of $376 million.
Trina Solar is the fifth largest manufacturer of PV solar panels in the world in terms of factory capacity. The leaders in the industry are Suntech Power Holdings and LDK Solar of China, Canadian Solar Inc., and SolarWorld AG of Germany. Trina was reported to have a 1.2 gigawatts capacity last December but have since then it has increased it to 1.9 gigawatts.
The top manufacturer of poly-silicon used in solar panels is Hemlock Semiconductor, which is owned by Dow Corning Corp. It is followed by Wacker Chemie AG of Germany, GCL Poly Energy Holdings of China and OCI of South Korea.
Project developers and investors are looking at the survivability and cash of the solar manufacturers. The top six companies got 55 percent of the solar panel market in the second quarter, compared to just 26 percent from last year.