EDITORS I VIEW
David Ridsdale Editor in Chief
Business as expected
The first quarter of 2012 has seen a number of solar based companies around the world run into financial trouble with some going out of business all together. If you were to take some of the media coverage to heart, both mainstream and trade, then you could easily believe the process is a complete shock or some other nefarious process. Other than the simple truth of an oversubscribed industry starting to consolidate as the harsh maturation process takes hold. There is no doubt this process has been amplified by the subsidised growth curve and the equally steep downside as subsidies are taken away or reduced to a more sensible amount. Sadly the current crop of failing businesses is to be expected from an industry wide point of view. None of which helps individual companies trying to maintain a bottom line but it is the capital truth.
Some of the higher profile companies facing financial difficulties, such as Q-Cells, may have been a shock to some but the company has had difficulty responding to the new shape of the global market in the last few years and were slow to respond in changing from a broad based company with high research overheads to a company more focused on core and key technologies. They learnt that you can only be all things to all at the earliest stages of industry development. Companies that are struggling or unsure of their future should look to other industries and take note how others in a similar situation have chosen to move forward. Other industries facing consolidation have seen companies position themselves not to be future leaders but excellent prospects to be purchased. Sometimes this is done by highlighting a company focus or patent to make themselves more desirable than they are. Sometimes the best that can be achieved is to be picked up by your competition.
Only a few years ago there was room for 5 - 10 companies at the top of different technologies and opportunities but that has reduced drastically with enough market and traction to see up to three companies holding the market at a technology point while the rest struggle with the crumbs. This process is normal in a growing industry and worried companies and individuals would do well to be aware of all their options as it will not get any easier with competing technologies and poor public perception of the opportunities and costs.
A great example of the poor perception is the continual use of Solyndra as a catch cry against government involvement and the excess of venture capital in a failed venture. The continued use of Solyndra as a generic derogatory highlights the ignorance of many who only want to deride the renewable energy movement as an expensive waste of time rather than a goal of ensuring fuel options for future generations. Even in trade sites there is shown an extraordinary misunderstanding of the Solyndra situation, the reasons, they were backed by the government and the subsequent reason for the failure. It is mostly to do with polysilicon prices and national arrogance that assumed the Chinese could never produce enough silicon in a short space of time. The actual technology worked. it was the economic assumptions made by industry and government that were so wrong.
These same assumptions are driving the industry again and we can expect many to appear shocked as each player drops out of the race. Not because they are not good enough. In fact we are likely to lose great ideas this year as economic assumptions will once again drive companies and individuals to decision making based on their hopes and not the harsh reality of the financial structure industries must work within.
David Ridsdale Editor-in-Chief
Issue III 2012 I
www.solar-international.net 3
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