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

Share on facebook
Share on twitter
Share on linkedin
Share on reddit
Share on 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 August 2021
The utility-scale PV market is poised for exponential growth and yet the industry still has many fundamental opportunities to improve on standards and best practice. Tracker shade loss has been one of those topics that deserve more attention, but has been typically handled by derate factors rather than trying to accurately forecast the loss over the life of the system. Join Nextracker’s subject matter experts, Aron Dobos and Neelesh Umachandran, and Rounak Kharait, director of solar energy assessments at DNV, for a webinar about why shade modeling matters and recommendations on what the solar industry should do about it.
25 August 2021
Energy Next is a new industry exhibition focusing on the latest renewable energy and energy efficiency technology, which will be held for the first time in 2021 in Sydney, Australia alongside the Clean Energy Council’s Australian Clean Energy Summit, the peak gathering of leaders driving Australia's energy transformation. Organised by the same people behind Australia’s largest clean energy event, All-Energy Australia, Energy Next will give visitors two days of access to key suppliers in the industry, free-to-attend professional development and industry workshops, and networking opportunities to better understand clean energy issues and solutions and learn about the latest developments in this transformational, dynamic sector.
25 August 2021
The Intersolar Summit Brasil Nordeste takes place in Fortaleza, Brazil. It addresses leading local and international experts on solar power and renewable energy in the region. The Summit’s mission is to provide in-depth education, enable high-quality networking opportunities, expand the use of PV technologies at regional and national level and strengthen the local PV industry. The Intersolar Summit Brasil Nordeste is organized by Intersolar South America - Latin America’s largest exhibition and conference for the solar industry: Solar Promotion International GmbH, Pforzheim, Freiburg Management and Marketing International GmbH (FMMI) and Aranda Eventos & Congressos Ltda, São Paulo as co-organizer.
25 August 2021
Join us to hear directly from the CTOs and heads-of-research from the top-20 cell/wafer producers to the PV industry today. The event will focus on predicting the key metrics underpinning the next big shift to n-type with answers to the key questions: When will the transition to n-type happen? Which companies will be first to 10 GW capacity and production? Who will be the key equipment suppliers for the new production lines? Which n-type process flow/architecture will emerge as the front-runner? What will polysilicon purity and wafer thickness levels look like for optimized n-type manufacturing? What will the upstream poly/wafer supply-chain look like in 5 years from now?
26 August 2021
In this webinar, JA Solar will present its product portfolio based on the latest technologies to improve your PV projects, ensuring maximum reliability and performance. During the webinar we will receive insight from JA Solar about its solar technology roadmap and how the manufacturer is providing customers with innovative solutions to suit their needs, while we will also analyse how to determine the best product solution for each solar project.
6 September 2021
The 38th European Photovoltaic Solar Energy Conference and Exhibition will be held online from 6 - 10 September 2021, allowing PV experts from all around the globe to participate with just one click! The EU PVSEC is the world's leading forum for PV Research and Development and the biggest Conference on PV Solar Energy worldwide. That is why PV experts from all around the globe are keen on gathering together each year to be part of this specialist’s event, to present and discuss the latest developments in Photovoltaics, to network and to conduct business.

Read Next

July 29, 2021
Tracker and racking provider Arctech has delivered SkySmart II tracking system to a 575MW agriculture-sharing solar project located in Nangong City, Hebei Province, China.
July 29, 2021
Unigreen Energy, owned by Hevel majority shareholder Ream Management LLC, has broken ground on a wafer and cell manufacturing plant that will produce 1.3GW of silicon n-type monocrystalline ingots and wafers as well as 1GW of heterojunction technology (HJT) solar cells.
July 29, 2021
Meyer Burger has revealed plans to launch a solar roof tile product, expanding its rooftop solar product range.
July 29, 2021
US residential solar installer SunPower has partnered with EV charging provider Wallbox to add EV charging technologies to its portfolio.
July 29, 2021
US residential solar installer Sunnova said it was investing in its end-to-end solar services to cater for customers demanding more from their rooftop installations.
July 29, 2021
The US Senate has passed a new bipartisan infrastructure bill after weeks of protracted discussions, establishing US$550 billion in new infrastructure funding as part of an investment described as “once-in-a-generation”.

Subscribe to Newsletter

Upcoming Events

Upcoming Webinars
August 19, 2021
At 9am (PT) | 6pm (CEST)
Solar Media Events
August 25, 2021
Solar Media Events
October 6, 2021
Solar Media Events
October 19, 2021