Intersolar 2013: Looking to the Future of the Solar Energy Industry

 
One thing was clear at Intersolar North America last week: nothing is clear about the future of the solar industry. That didn’t stop analysts and researchers from offering their views. And for the most part, they painted a rosy picture of the future for solar.

A New Phase for the Solar Industry

While the current panel oversupply has made for a bumpy ride, what’s catastrophic for some manufacturers is a boon to installers and customers. According to Edward Cahill of Lux Research, the industry is recovering from these hardships and is poised to grow — though not, of course, without leaving a bloody trail of consolidations and bankruptcies. But those consolidations will help the industry return to equilibrium. Oversupply remains over 100%, but that will change as the Chinese government limits easy credit to just their top-tier manufacturers and others also retract. Cahill estimated that increasing demand and reforming supply will converge in 2015, with demand in the U.S. reaching around 62 GW by 2018. Other regions, such as China, Japan, and India, will add to that growing demand. By 2018, we’ll shift from a scenario in which just two countries, Italy and Germany, accounted for over 60% of demand to one in which no one region will make up over 30%.

Michael Barker of NPD Solarbuzz agreed that the balance of supply to demand is shifting and the market is diversifying. In 2012, supply was almost double the annual demand. Now, although capacity is still going up somewhat, demand is increasing even more. And as the market spreads over a number of regions, we’ll see a more level playing field. That’s also true for market segments. Although each region differs in its market makeup, in general, markets will be diversified, with utility-scale installations gaining prominence.

Overall, the executives at Thursday’s CEO panel echoed the sentiment that solar is entering a new phase and moving toward a more sustainable way of business.

A point of contention on the panel was the trade wars with China. While Gordon Brinser of SolarWorld argued that China has unfairly dumped cheap panels on the market, others maintained that it doesn’t help the industry to engage in trade wars — and it certainly doesn’t help to further our goal of spreading solar. All agreed that something needs to be done, though. Moderator Dr. Eicke Weber of the Fraunhofer Institute suggested that we narrow down the trade argument to a few clear, enforceable demands and stick to those. He noted that it would be “quite unpleasant” for our forward-looking clean energy market to go backward by engaging in trade wars.

In spite of some differences, though, all could agree that one size no longer fits all when it comes to solar. Diversifying markets call for flexibility, in terms of size  and type of installation, financing, and policies.

Johannes Kneip of Centrosolar pointed out that the industry has gone from a niche market to a global industry in just a decade. And Andre-Jaques Auberton-Herve of Soitec estimated that by 2016, 80% of the market may be outside Europe. As it moves to sunny areas with growing economies and ample land, we’re likely to see more utility-scale installations.

Pierre-Pascal Urbon of SMA agreed that we can expect a shift to larger-scale projects, plus a larger number of smaller markets instead of a few big markets, requiring solar companies to maintain a global footprint. He was less optimistic than some on the panel. He even suggested that we’re just at the beginning of the doldrums, with overcapacity remaining a problem. But he did see new opportunity in remote areas of sun-rich countries, where large conglomerates, factories, and mines have huge energy demands.

A Solar Revolution

Though in the short term we’re still facing a bumpy road, we could be on the brink of a solar revolution. The cost of investing in new energy projects will push countries with increasing energy needs toward renewables. And even developed countries will find that solar is one of the most affordable ways to provide electricity. We could see an explosion in the market similar to what happened with computer memory.

The increasing affordability of solar will allow it to spread. But Intersolar attendees were also reminded of our moral imperative to move to renewables. Johannes Kneip asked us to look back a bit with his question, If the Romans had burned all the fossil fuels, how would they have gone down in history?

Further inspiring words came earlier at the keynote, where Governor Jerry Brown made it clear he’s not willing to settle for California’s current solar leadership, good as that’s been. He stressed that we haven’t done enough and that our current response is “feeble compared to the challenge.” When we fight nature, he said, we fight ourselves. Brown promised to remove all obstacles and help us move to a renewable, sustainable America and a solar world. With this kind of leadership, plus the right conditions for creating a sustainable future, we can look forward to a bright future for solar.

This post was originally published on PV Solar Report.