The solar story for 2009 is an oft repeated tale of oversupply induced by a lack of demand. Lux Research does nothing to change the story with a new report it released yesterday.
In its report Lux says that the solar market will move from $36 billion over 5.5 GW in 2008 to $29 billion over 5.3 GW in 2009. Cell and module capacity will outweigh demand twofold to 10.4 GW, leading to a big industry shakeout which will eliminate all but the biggest solar companies. On the plus side though, the over supply will lower the price of solar making it more in line with grid parity, which Lux estimates will occur around 2011. This will fuel its growth for the next 4 years, causing the industry to grow to $70 billion on 18.5 GW by 2013.
An interesting result of this oversupply will be a slight dent in the business of some innovative late stage venture backed companies says the report’s lead author, Ted Sullivan.
Companies such as Miasole and HelioVolt are going to have a difficult time bringing products to market for the next 12 months or so because their products will be crowded out by crystalline silicon modules, which are proven, cheap and widely available. Basically innovative technologies are going to suffer on the commercialization end due to financiers concerns about both technology and warranty risk (ie, is this going to break? If it does, is the company strong enough to stand behind it for 20+ years?).
He adds that VC investment will not be a “feeding frenzy” but it won’t kill investment in innovative technologies, either. “VCs are (wisely) exploring more segments of the value chain than they were before – from encapsulates to inverters – and not just over-saturating investment in cell/module makers.”
Another change predicted for 2009: Germany becomes the buyer of last resort in Europe, as Spain disappears with its subsidy cap limited to 450 MW for 2009. China might be a surprise and snap up more solar energy depending on its government’s moves. Speaking of government moves, the U.S. market could reach $2.7 billion across 495 MW for 2009, but the stimulus could change all of that.
Here is the report’s forecast what will happen to the different types of solar technologies in the coming years:
Crystalline Silicon (x-Si): Will continue to dominate the market in 2009, with a market size of $21 billion, and despite losing share in coming years will reach $50.6 billion in 2013.
Thin Film Silicon (TF-Si): Market will grow to $4.1 billion in 2009, and hit $8.3 billion in 2013.
Cadmium Telluride (CdTe): Continues to grow aggressively on the back of First Solar to $2.7 billion in 2009 and $5.9 in 2013.
Copper Indium Dallium (di)Selenide (CIGS): will grow quickly from a low base, and despite widespread company failure, account for $321 million in revenue in 2009, expanding to $950 million in 2013.
Heliostat Concentrator Photovoltaic (HCPV): Will reach $290 million in 2009 and $900 million in 2013.
Solar Thermal: Will stall, with its market size falling to $670 million in 2009, but rebound to hit $3.0 billion in 2013.