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Solar Cos. Bitten Twice By Economic Crisis

April 22, 2009 RSS Feed Print

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Interesting tidbit from Jefferies & Co.'s '09 cleantech outlook. Solar companies are getting squeezed by both the credit crunch in Europe and the stimulus in the Chinese economy (home to a big chunk of low-cost solar panel makers). From the report (bold is mine):

We see the fundamentals for solar as still somewhat unstable. We believe module oversupply is being exacerbated by liberal lending practices among Chinese banks which continue to support many public cell and module plays with ever larger amounts of short-term debt, leading to a disincentive to rationalize industry capacity. Conversely, in Europe, the financial institutions historically responsible for the bulk of project lending in the renewables space remain focused on fixing their own balance sheets and unable to fund significant amounts for traditional project lending time frames, apart from key projects in Germany.

Too much product in China thanks to loose lending by government-sponsored banks meets ailing demand in Europe, where banks are still in fearful hibernation. Just goes to show: The recovery in solar, as in the rest of the market, will always and everywhere be a credit-driven phenomenon.

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hotelbuchung niederlande of 6:12AM April 22, 2010

To the previous writer on simple economics: currently we purchase electricity in this country a roughly US$0.06 - US$0.08 per kWh. The mean cost for solar produced electricity is about $US0.21 per kWh. Blaming government officials for a weakness in economics of photovoltaic energy conversion is like blaming a polar bear for global warming.

Jeremy Briggs of GA 7:05AM April 23, 2009

It seems so amazing to me that a country like Germany where Munich is at the same latitude as Seattle and its northern border the same latitude as Juneau, Alaska has the most advanced, efficient solar generation on the planet and we, here in the USA can't power much more than a new house or two. Our Bankers, Manufacturing conglomerates and Federal Government are so bureaucratic they can't get out of their own way.
Its simple economics and common sense, but that is something no one learned at the University. Every bureaucrat and government official all the way to Mr. Obama ought to be ashamed of themselves.
My point here is, don't complain about Chinas banking system or Germany's economics, take care of your own house cleaning before looking else where...
We could be using solar generation for half of all the new commercial power needs in the country if someone had a lick of sense...

Tom in San Diego of CA 10:53PM April 22, 2009