Will the future of solar industry be written in Chinese?

According to a recent report published by an American research center, the market of photovoltaic technology will be highly concentrated by year 2015. Most of its offer will besides be China-based and many of today’s competitors will somehow disappear. Such a scenario is not without recalling of what is already happening worldwide on the photovoltaic market nowadays.

In Europe as well as in the U.S., solar companies have all been put in dire straits by Chinese competitors because of the price war that has been raging on the photovoltaic market for almost ten years now. China’s conquests on this market are overwhelming and not very likely to stop. Some researchers who studied it recently indeed concluded that seven out of nine leading solar module manufacturers will be based in China by 2015.

According to GreenTechMedia Research, the inclination for concentration on the solar market is such that many of today’s actors will probably go bankrupt or be bought by 2015. Solar industry in developed country is especially threatened since GTM explains that half of those manufacturers are based in Europe, the U.S. and Canada. Facing low-priced products from China, most of those producers will disappear and give way to a highly concentrated market.

Even though China has already started to shake Northern America and Europe’s solar manufacturers, GTM point out that Chinese industry is probably not as competitive as first thought. According to the report, many companies in the solar industry in China indeed depend on government help. Beside, their production is quite low compared to other actors on the market. For GTM researchers, such companies are already dead but they don’t know it. Those “solar zombies” are thus very likely to disappear along with most of the eastern world’s solar industry.

At the moment, global demand for solar energy production is estimated to be set between 30 and 50 GW. Production capacity on the other hand is believed to have reached 100 GW according to the Financial Times. On this saturated market, the struggle can now only be harder between companies that will have to fight to maintain profitability. It is still early to say if GTM scenario will happen, but the market has already started to resemble it a lot.

In China for instance, the Financial Times reported that two solar cells manufacturers were on the verge of bankruptcy and only maintain afloat through local governments bailouts. Such events have occured in the region of Xinyu and Wuxi and sound a lot like what GTM foresaw when writing its report. As for American and European companies, they struggle to be competitive and will have to be tremendously imaginative to escape the fate they seemed doomed to.