EDITORSVIEW
No more baby steps A
lthough some in the solar and PV industries have felt the industry they work in has been a strong and vital market place on a par with any other, the truth is solar and PV industries have been marginal in terms of economic position and acceptance by the financial world. Following the last few years of explosive growth in an ever increasing number of new markets and regions the industry has now developed a global and successful value chain that is key in developing the longer term industry goals of a self sustaining concern no longer dependant on government subsidies.
While there is no doubt some regions and companies still rely heavily on subsidy to sustain local businesses and markets, the global view of the industry is starting to show the overall strengths that enable the solar industries to move forward with more confidence and strength and less likely to be attacked by fearful competitors as renewable energies slowly become a bigger part of the energy picture. The overview of the stock listed companies on page eight demonstrates the strength of solar companies and not just at the manufacturer level. The fact that a number of the companies are material suppliers or BOS suppliers shows the maturing state of the global value chain. The numbers these companies are generating demonstrates firmly that this is no cottage industry.
Another key indicator of the strength of the global possibilities is the consolidation occurring within the industry but more importantly, the size of external investors beginning to snap up companies as they develop their own renewable portfolios. With some of these investments coming from major traditional energy players it shows that another tipping point of expectation has been reached within the financial communities.
Another interesting trend is a number of companies buying up mining and distribution rights of key and rare materials as profit potentials has instigated long term strategies. Such strategies suggest that the embedded manufacturing processes are expected to become the established norm and new technologies will face the same dilemma that innovation in the semiconductor industries faced. Despite the quality of new ideas they will have a harder time disrupting embedded process unless they can prove there is a greater cost saving or little interruption to output.
The solar industries are reaching a tipping point where they are caught between the humanitarian ideals that initiated the industry and the capitalist demand for ever increasing growth of profits. As the financial world pushes further into the value chain there will be increasing pressure for the industry to sell itself as a singular solution to energy needs rather than a part of the renewable energy sector. This could send mixed messages to consumers and investors. The rest of this year should provide clues as to which traditional energy companies intend to buy into the industry and which technologies, regardless of capacity and ability, will become the incumbent choice that future innovation will need to displace. Hopefully technology and output is the key factor and not just hoped for fiscal outcomes. At this critical point the industry needs to ensure confidence along the value chain.
David Ridsdale Editor-in-Chief
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www.solar-pv-management.com Issue VII 2011
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