The solar industry’s cloudy years did have a silver lining. After reporting heavy losses in 2011 and 2012, China-based titans Yingli Green Energy (YGE.US) and Trina Solar (TSL.US) are both poised to become the first batch of solar module and panel makers to make 1 gigawatt of quarterly shipments since an industry recession forced them to take an ax to their expenses to boost their competitiveness.
The cuts to manufacturing costs helped both vertically integrated makers — which produce everything from solar cell materials to modules, panels and systems — reportedly ship more than 800 megawatts of solar products in the last quarter of 2013. The companies’ cause was also aided by stabilizing product prices and stronger demand, especially from outside Europe in markets such as China, the United States, India and Japan.
The combined market share of Yingli and Trina increased to nearly 15 percent from 12 percent in the second quarter of 2012, according to a report by research firm NPD Solarbuzz. The top 20 Chinese manufacturers are estimated to control about 68 percent of the global market.
Yingli narrowed its losses to US$38 million in the third quarter, 25 percent of the level a year earlier. Trina even reported a moderate gain during the period.
But while module makers are seeing light at the end of the tunnel, photovoltaic equipment suppliers may have to tough it out a bit longer until business is good enough for factories to again justify aggressive investment in new production lines.
Previously, baseless optimism about solar energy’s future lured a rush of new capital into the industry and inflated equipment demand. But the huge industry shakeup in the last few years brought the days of unbridled solar panel factory investment to an end.
With lingering overcapacity still a key issue, new investors will think twice before venturing into solar manufacturing, meaning the bonanza for equipment makers is unlikely to return either.
Zhejiang Jinggong Science & Technology (002006.CN), for instance, lost 195 million yuan (US$32 million) in 2012 and is expecting a similar loss in 2013, according to financial website Yicai.com.
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