The consolidation is well underway at the installer level. See the acquisition of projects vertically by First Solar and horizontally by project developer Recurrent.
So the giants are buying down (into the vertical from cell/module maker to installer) and across (from project manager/installer across to others less well financed). Its all about which business model makes sense, to own the customer and to project the capacity utilization of our factory (First Solar strategy) or to become the ultimate customer for those cell/module makers who prefer to stay where they are and focus on driving costs down and technology upwards (Recurrent/Suntech strategy).
First Solar’s make sense for them because they are a low cost provider of thinfilm modules and that fits a very particular kind of project (thinfilm cells are not the best for all applications due to their lower efficiency). Recurrent is becoming a utility power provider. Their model is driving project cost down using the best equipment (ie. technology agnostic). Is there room for both? Only the market will decide, and just as it has decided there is not room for all the players alive today, so will it choose who will be the ones that stay alive through this cycle. I look at companies like Canadian Solar and I wonder what is their unique selling proposition? How can they possibly compete against the giants who have the financial capacity to go across the crisis with their backbone still strong? If you look at all of the lamination plants closing, I believe that some cell plants are next. The game is getting bigger and bigger and the ones who do not have a clear strategy, clear vision and clear identity (ie. jacks of all trades) will simply not make it.
Interestingly enough, this market is a boon to ICP Solar. Customers are seeking quality products vs the crap some are putting out and we’ve now proven it with side by side sales comparisons in select retailers. When our products were placed in similar size retail displays, we outsold the competition 2 to 1. Stay tuned for a bunch of exciting developments for us this year as we continue to move forward our strategy of distinction and quality. The bottom dwellers of quality who were once a force, will soon become a farce because in a recession, consumers are much more careful to give away dollars, particularly in a category they know little about. So just as the macro economic challenges put pressure on cell/module makers to revise their strategy, so will those closest to the consumers who know that a consumer who is unwilling to spend as easily as before must have faith in what you offer.
Have a great solar day,
Sass