Econintersect: Trefis has forecast a catastrophic decline in solar photovoltaic (PV) equipment sales during 2012. The basis of this projection appears to be primarily from the analysis of Applied Materials (NASDAQ:AMAT) which has suffered a a 62% decline in its EES (Energy and Environmental Solutions) revenues. Trefis specifically estimates that AMAT's solar revenues may decline by as much as 80% in the current year. Longer term Trefis is more optimistic that this market segment will pick up again.
Here is an excerpt from the Trefis reports:
The solar industry is currently struggling to cope with excess manufacturing capacity in the market. The equipment market is dependent on the sales of solar PV and thin-film products to solar energy companies. We believe the current year will see lower demand for solar PV as macro headwinds push down demand growth, making it more difficult to plug the demand-supply gap. Hence, we forecast the solar PV equipment market to decline to almost half its current size in 2012.
The solar sector has been hard hit in the past year or so. Several firms have failed, among these are Evergreen Solar, Solyndra, Energy Conversion Devices, Abound Solar, Solar Millenium, Solar Trust of America, Q-Cells and Uni-Solar, to mention a few.
Ucilia Wang listed fifteen solar company bankruptcies (12 not mentioned above) in an article published 05 April 2012 (Gigaom).
The few companies still in business, many with serious challenges to stay afloat, have seen stock prices decimated. The following chart from Yahoo Finance shows how investors have fared in some of the companies believed to be in the strongest positions.
Click on chart for larger image.
The four stocks shown are First Solar (NASDAQ:FSLR, Suntech Power (NYSE:STP), Yingli Green Energy (NYSE:YGE) and Trina Solar (NYSE:TSL). They have all declined by 70% or more over the past four years.
- Applied's Q3 Earnings Indicate a Drastic Decline In Solar Revenues This Year (Trefis, 22 August 2012)
- Chart: The death spiral of solar bankruptcies (& counting) (Ucilia Wang, Gigaom, 05 April 2012)
- Solar bankruptcies: Why Colorado's Abound isn't Solyndra (Mark Jaffe, The Denver Post, 11 July 2012)
- Kodak, Solar Millenium, Xanadoo, St. Vincent: Bankruptcy (Bill Rochelle, Bloomberg Businessweek, 02 July 2012)
- As Its Competitors Go Bankrupt, First Solar's Long-Term Strength Is Intact (Helix Investment Management, Seeking Alpha, 09 July 2012)
- Solar company bankrupt despite DOE pledge (Joel Gehrke, The Washington Examiner, 02 April 2012)
- Uni-Solar's Bankruptcy and what it reveals about the state of the Solar Industry in US (Solar PV & Renewable Energy prices, 04 June 2012)