Market research firm Gartner expects to see winners and losers within the solar industry due to the changes expected in the German feed-in tariff changes. Gartner believes there will be further module pricing pressures, especially after a rush to complete projects before the tariff changes take effect, which means from July 2010 onwards as proposals phase in changes starting in April for rooftop installations and ground-mounted and farmland sites from July. There will also be a ripple affect with prices on other key markets such as Italy and the U.S., according to Gartner in its weekly newsletter to clients.
The knock-on effect of further price declines could result in acceleration in the consolidation of what Gartner analysts, Jim Hines and Al Velosa, described as ‘walking wounded,’ particularly thin-film start-ups.
They noted that thin-film start-ups have already struggled to be competitive against the rapid price declines of conventional c-Si modules as polysilicon prices plummeted due to the overcapacity in the sector. Thin-film firms have also struggled due to high fixed-cost structures and ‘bankability’ concerns caused by the collapse of project finance brought on by the financial crisis.
However, Gartner analysts noted that the pricing environment could favour others, especially producers with the lowest cost structure as they will be better positioned to absorb price declines.
Others with adequate financial resources could invest more in R&D that is aimed at improving rates of return through higher system performance and lower manufacturing cost.
Another ‘winner’ could be inverter and power optimization technologies, which have the potential to improve the harvesting capabilities of solar systems, contributing to higher ROI, countering some of the tariff change impact.