IMS report sees PV component profits, gross margins take sharp hit in Q4

Share on facebook
Facebook
Share on twitter
Twitter
Share on linkedin
LinkedIn
Share on reddit
Reddit
Share on email
Email

According to a new study by IMS Research, PV component profits are expected to fall by 70% year-on-year in Q4 2011. Furthermore, an examination of the polysilicon, wafer, cell, module and inverter industries led the research organization to conclude that the continuation of dropping prices in 2011 will cause gross margins for the whole PV industry to drop 17% to 12.4% in Q4.

However, despite the dropping profits and gross margins year-over-year, IMS noted that sequentially gross margins and profits would actually see an increase since most of the damage to margins occurred earlier this year. Ash Sharma, senior research director for PV commented, “Gross margins will stabilize somewhat in Q4’11; in fact total industry profit will increase by 10% compared with the third quarter. However, margins will of course be considerably lower than a year ago and industry profit will be 70% lower in the fourth quarter compared with the last year”.

IMS additionally noted that although PV module suppliers were hard hit with the severe fall of prices this year, they still hold most of the PV component profits in the industry. “The rapid fall in module pricing and the demise of many if its suppliers has been well documented. However it’s important to note that these same suppliers will still generate more than 50% of industry profits in 2011”, Sharma advised.

The IMS report acknowledged that out of all the players in the PV module supply chain, polysilicon suppliers are experiencing some of the highest margins, even though their profits are less than half of those produced by module suppliers. “Although polysilicon suppliers had average gross margins above 30% in 2011, which was more than double that of module suppliers, polysilicon suppliers will only generate 19% of industry profits due to their relatively lower revenues”, added Sharma.

In review of the five industries that were researched, IMS found that inverter suppliers had the highest gross margins in spite of oversupply and price reduction woes that the industry has endured. IMS noted that inverter suppliers would spawn 17% of the industry’s total profits in 2011.

“One reason for the inverter industry’s relatively robust margins is that Chinese suppliers have so far failed to gain a significant foothold in this market. Unlike the module market, in which Chinese suppliers account for roughly half of all shipments and revenues, Chinese-branded inverters accounted for just 3% of industry revenues in 2010. This is likely to change however now that the domestic market in China is starting to take off. More than 1.5GW will be installed in China this year and the vast majority of projects will be using Chinese inverters”, Sharma concluded.

The report concluded by stating that even though Q4 margins will see a slight growth, the industry’s margins will more than likely continue to drop in 2012 and will reach only 10.4% in Q1 2012. 

19 July 2022
As New South Wales is gearing up to become a renewable energy superpower, an exciting clean energy event is coming to Sydney. Energy Next is a free-to-attend industry event focusing on the latest renewable energy and energy management technologies, which will be held from 19-20 July 2022 at the ICC Sydney in Darling Harbour. Organised by the same people behind the country’s largest clean energy event, All-Energy Australia, Energy Next will bring a quality exhibition and technical session series to NSW. Energy Next will also host the Clean Energy Council’s Solar Masterclass with a program developed for solar designers and installers. Across two days, Energy Next will provide an extensive exhibition, workshops and networking opportunities for those working in the renewable energy industry to meet with leading suppliers, discover the latest technologies and gain an understanding of how to successfully launch new clean energy projects.
21 July 2022
The rooftop solar PV market is set for significant growth, but installers are being held back by complicated design software that is slow, cumbersome and fails to take into account rooftop shading, module compatibility and energy storage. Huawei’s SmartDesign 2.0 is a web-based PV and energy storage system tool that promises to solve all of those issues, and much more. This webinar will provide a live demonstration of the SmartDeisgn 2.0 tool, showing how installers can quickly complete Huawei PV & ESS system designs and assemble a professional report with 3D site view for potential customers, streamlining the design and sales service.
23 August 2022
Intersolar South America, South America’s largest exhibition and conference for the solar industry, takes place at the Expo Center Norte in São Paulo, Brazil, on August 23–25, 2022, and has a focus on the areas of photovoltaics, PV production and solar thermal technologies. At the accompanying Intersolar South America Conference, renowned experts shed light on hot topics in the solar industry. In 2021 – despite the Covid-19 pandemic – Intersolar South America welcomed more than 28,000 visitors and over 1,000 conference attendees over 3 days. 200+ providers showcased their products. Combining local and international expertise, Intersolar South America brings together the PV and solar thermal sector to discuss the current status and strategic trends for Latin American PV markets, as well as technology innovations and new business opportunities. Overall, distributed generation is still driving momentum in the Brazilian market.
6 September 2022
Intersolar Mexico sits at the cross-section of photovoltaics, solar heating & cooling technologies, and energy storage. The event serves as the industry’s go-to source for invaluable technology trends and premier B2B contacts in the promising Mexican solar market. From September 6–8, 2022 Intersolar Mexico together with the co-located The GREEN Expo® and Aquatech Mexico will take place in Centro Citibanamex, Mexico City.
19 September 2022
RE+ 2022 is the umbrella event that includes SPI, ESI, RE+ Power, and RE+ Infrastructure. As North America's largest renewable energy event, it's a catalyst for industry innovation that's supercharging business growth in the clean energy economy.
20 September 2022
From source to generation, from grid to consumer, the boundaries of the sector are blurring and this evolution is being shaped by established players, external disruptors, innovative start-ups and the increasingly engaged end-user. Enlit Asia is the unifying brand for POWERGEN Asia and Asian Utility Week, showcases expert knowledge, innovative solutions and foresight from industry leaders, coherent with Asian strategy to achieve a smooth transition towards a low carbon energy supply. This year, Enlit Asia will be co-located with Sustainable Energy Technology Asia (SETA) & Solar & Storage Asia (SSA).

Read Next

July 4, 2022
Net meting for rooftop PV is ending in Indiana through a policy change that critics have warned will make solar uneconomic for most families and businesses in the US state.
July 4, 2022
Tongwei has become the latest upstream solar manufacturer to increase prices as the cost of raw materials continues to spiral.
July 4, 2022
Shell Overseas Investments and renewable energy company Emerging Power Inc. (EPI) have agreed to jointly develop, own, operate and maintain 1GW of utility-scale solar PV in the Philippines by 2028.
July 4, 2022
Thin-film technologies such as cadmium telluride and perovskites can markedly reduce the carbon intensity of PV compared with silicon alternatives, according to researchers at the US National Renewable Energy Laboratory (NREL).
July 4, 2022
S&P Global Commodity Insights has partnered with renewables advisory firm Pexapark to create a new power purchase agreement (PPA) benchmark.
July 4, 2022
Norwegian energy data and intelligence company TGS has acquired renewable energy asset and real-time data manager Prediktor.

Subscribe to Newsletter

Upcoming Events

Solar Media Events
October 4, 2022
New York, USA
Solar Media Events
October 11, 2022
Virtual event