2011: Return of the Solar Shakeout

For many in the PV industry, the term "shakeout" conjures up not-so-fond memories of the winter of 2008. The reverberations of the global financial crisis and the difficulty in filling a Spain-sized hole led to a sharp drop-off in global demand, and the resulting oversupply and precipitous price drops led both market participants and pundits to foresee an apocalyptic future for many PV manufacturers. A shakeout (‘consolidation’ to the politically correct), they said, was arriving, and layoffs, restructurings, acquisitions, and insolvencies were on their way. Many of the more than 250 wafer, cell, and module firms around the globe would simply be unable to survive in the brutally competitive dynamic that would surely ensue, leaving behind a leaner, fitter supply chain. To quote GTM Research’s own words circa January 2009: "What will likely emerge…is a substantially smaller list of companies with relatively higher concentrations, and a trimming of the overall capacity amounts to match real market demand".

Fast forward a year and a half. Have the prophecies come true? No doubt, almost every PV manufacturer had to endure severe hardship for the first half of 2009. Prominent firms have felt the heat of significant restructuring and layoffs (Q-Cells (QCLSF.PK), REC, Solon (SGFRF.PK), BP (BP), United Solar). Consolidation of sizable proportions has taken place across the value chain (MEMC’s (WFR) acquisition of SunEdison, First Solar’s (FSLR) acquisition of Nextlight and Optisolar pipelines, the entry of cell and wafer manufacturers into module production). And the prophecies of untimely demise have indeed come true for noteworthy firms and facilities (Applied Materials’s (AMAT) Sunfab business, customers Signet and Sunfilm, BP’s and GE‘s plants in Spain and Delaware, respectively).