Solar shakeout will bring more failures, few deals
A brutal 2011 has left the solar industry dazed, damaged, and on the cusp of a major shakeout of weaker players that are more likely to shut down than be snapped up by their stronger rivals.
Solar subsidy cuts in top markets Italy and Germany prompted a 20 percent drop in the price of solar panels this year, bringing the fast-growing solar industry to a critical tipping point. Even companies that had been stock market heroes find themselves as the walking wounded, struggling to cut costs in a market awash with solar panels.
In the long run those price declines are healthy for an industry that relies on government subsidies to make its products competitive, but the pain is more than some can handle.
“The process of separating the wheat from the chaff may be under way now, and that may be a good thing,” said Rob Stone, analyst with Cowen & Co.
China with it’s massive, underpaid workforce is very hard to compete with.