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INDUSTRYNEWS


Top 10 stock listed proves mainstream acceptance


THE SOLAR ENERGY field is no longer relegated to some obscure research facility dedicated to the furthering of science for its own sake, but is becoming widely accepted as a legitimate, viable, and profitable alternative to more mainstream energy resources.


SolarPlaza’s most recent list of the top ten publicly traded solar energy companies illustrates that when it comes to competitiveness and profitability, many solar energy companies are more than capable of running with the big boys.


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Heading the list of Top Ten stock listed companies (based on market capitalization) is First Solar. The company’s Thin-Film technology and massive module production capacity, expected to reach 2.3GW in 2011, has assured First Solar of a steady position as an industry leader since 1999. This is obviously reflected in the company’s market capitalization, an impressive $10.7 billion that stands tall above the other companies in this overview.


growth systems and related photovoltaic manufacturing services. Technological growth and innovation continues to drive the industry creating new opportunities for expansion. These companies and others like them continue leave their mark on a growing industry.


Although the top 10 is dominated by module manufacturers such as First Solar, REC, Trina Solar, Suntech and Sunpower, it is interesting to see other parts of the supply chain are featured. For example, in second place we find GCL-Poly Energy, a polysilicon and wafer supplier, while third place has been claimed by a producer of solar inverters, SMA solar technology.


That development is an integral part of solar energy’s infrastructure and further growth is demonstrated by GT Solar, which occupies the number six space. GT Solar is a provider of polysilicon production technology, crystalline ingot


Interest in solar energy is nothing new. People have been taking about it for decades. But it is only recently that technology has enabled us to explore the possibilities and broaden the boundaries of what we know about solar energy. The pursuit of solar energy as a realistic energy source shows no signs of waning; which is good news for businesses, consumers and investors as well.


The technologies used to collect and store solar energy are constantly evolving, allowing for increased efficiency and cost effectiveness. These top ten stock listed solar companies continue to promote growth and meet the challenge of providing sustained profitability to their investors head on.


PV price war sees profits decline


A PERIOD of highly competitive pricing from PV module suppliers has led to gross margins declining by over 25% in the last six months, according to the latest analysis from IMS Research. Suppliers have been forced to engage in a tough price war, but have not been able to reduce their costs as quickly as their prices; their margins have been the victim.


IMS Research’s latest quarterly report on the industry reveals that suppliers have reduced prices by around 15% in the last six weeks in order to compete in an industry that is currently plagued by oversupply.


Average crystalline PV module prices had been close to $1.80/W in the first quarter of 2011; however, a sudden change in market dynamics has resulted in sharp price declines, and the same modules are now being consistently priced below $1.40/W.


Rapid reductions in the price of cells and wafers have helped to offset PV module price declines and ease the impact on suppliers’ margins. However, whilst polysilicon spot prices have fallen by over 30% since the end of 2010, contract prices have held relatively stable so the average prices have fallen at


a far slower rate. Average polysilicon prices stubbornly remaining above $50/kg have limited the ability of downstream suppliers’ to reduce their costs.


“Vertically integrated Chinese Tier-1 suppliers of crystalline PV modules have some of the most competitive cost structures in a wide field of manufacturers, and had been producing with gross margins in the high twenties in 2010,” commented Sam Wilkinson, Senior Market Analyst at IMS Research. “Margins have already fallen from their peak in Q3’10. Current pricing levels are putting huge pressure on these suppliers’ margins; we believe their average gross margins could fall below 20% by Q3’11, with Tier-2 suppliers’ margins even lower.”


IMS Research estimates that the total gross profit generated by the global PV module supplier base, which had averaged around $2.5 billion per quarter in 2010, declined sequentially by close to 40% in the first and second quarter of 2011, due to reduced margins and declining shipments. A rebound in demand is predicted in the second half of 2011, which will help suppliers’ profits to recover. IMS Research predicts that total PV module supplier gross profit will grow once again in Q3 and Q4’11.


www.solar-pv-management.com Issue VII 2011


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