Jonathan Hoopes of ThinkEquity has a sneaking suspicion that solar panels may be piling up in warehouses around the world, which could be bad news for manufacturers. Hoopes specifically looked at First Solar, manufacturer of CdTe thin film modules, and six of that company’s customers. Based on panels shipped by First Solar versus panels installed by its customers, he estimates that as much as 103 MW worth of panels are sitting unused in various warehouses.

It is an issue complicated by the current global economic depression, as things are not set to look any better in the near future.

First Solar is set to ship out another 353 MW worth of panels to its top six customers in 2009, but excess supply could put a wrench in those plans.

Most of First Solar’s shipments go overseas to Spain and Germany, where feed-in tariffs have catapulted the two countries into the lead worldwide in solar installations. Yet prices are falling there as supply outstrips demand. Indeed, some installers in Spain have reportedly dropped the price to $3 a watt.

And it’s not just thin film manufacturers that are feeling the crunch. World-leading crystalline silicon manufacturer Q-Cells announced recently that it will cut production in the following year. What all this will truly mean for the solar industry is unclear to me and most experts. Hoopes, in answer to these revelations, proceeded to downgrade First Solar’s stock and shaved back predictions for the next few years. But the effect may be more palpable for the silicon market because First Solar’s thin film cells are already cheaper — although less efficient — than traditional PV cells. A further divide in price and a lack of cash flowing through world economies makes things kind of scary looking into the near future. Although more generous federal incentives in the United States, and the possibility of an aggressive approach to renewable energy by a new administration, could pick up some of the slack.

Source: GreenTech Media

Posted on January 19th in Solar News by Dan.