Comments on: Solar Operating Margins Compared to Other Industries

By: Anonymous

Anonymous — Mon, 21 Nov 2011 21:44:00 +0000

Looks like this article got some interest from people who are knowledgeable about the financial aspects of solar manufacturing. I’d love it if one/some of you would contribute periodic pieces about how the solar business is doing.

Something that I ran into today. Apparently panels were selling for about $4/watt in early 2008 and now Chinese panels are selling for $1.15/watt. That’s an amazing price drop. It suggests that we should break $3/watt installed soon and that means electricity for under $0.09/kWh in the sun belt.

http://www.greentechmedia.com/articles/read/Solar-Module-Pricing-vs.-Analyst-Estimates/

It looks to me that more shakeups are coming.

First, there’s NREL’s Optical Cavity Furnace which promises to lower process costs, speed processing time and raise efficiency perhaps 25%. A big jump in efficiency would mean major drops in balance of system costs (racks, labor, etc.).

http://www.nrel.gov/news/features/feature_detail.cfm/feature_id=1629

Then GT Advanced Technologies has new furnace approach and a new way to make ‘exotic’ silicon at an affordable price. They’re talking a 30% increase in efficiency and a much better process of silicon into wafers.

http://www.technologyreview.com/energy/39157/page1/http://www.technologyreview.com/energy/39157/page1/

We might be only a few years away from installed solar at $2/watt.

OK, knowledgeable people. How about stepping up and keeping the rest of us up to speed?

By: Anonymous

Anonymous — Mon, 21 Nov 2011 21:02:00 +0000

Thanks a lot! Very useful comment. I knew I was dipping my toe into an area I don’t have that much knowledge on, but love learning everything I have for doing so.

By: Anonymous

Anonymous — Sun, 20 Nov 2011 19:00:00 +0000

Christian, that email didn’t seem to work. Feel free to email me at zach@importantmedia.org — I’d love to have you contribute a piece or more if you’re interested.

Thanks

By: Anonymous

Anonymous — Sun, 20 Nov 2011 19:00:00 +0000

Thanks! Shoot me an email at zach@importantmedia.org to discuss.

By: Anonymous

Anonymous — Sun, 20 Nov 2011 18:40:00 +0000

All margins above should be operating margins now (i think they were before, but removed Canadian Solar’s numbers from Alt Energy Stocks and input more useful info).

By: Anonymous

Anonymous — Sun, 20 Nov 2011 18:39:00 +0000

I’ve updated by adding a list of operating margins from January 2011 — I’m not finding more recent compiled somewhere. And, as I note above, while 2008 was an exceptional year for those industries, 2011 is for solar.

Have also added more info on operating margins for numerous industry leaders. I’m not aware of the overall average for the industry, sorry.

By: Anonymous

Anonymous — Sun, 20 Nov 2011 18:32:00 +0000

Thanks, Christian. I’ve updated the post using some of the information from your piece. Nice one!

By: Anonymous

Anonymous — Sat, 19 Nov 2011 22:23:00 +0000

Thank you Bob. I am not an expert on polysilicon, and am using the same public information that we all can access. Polysilicon prices have fallen considerably, but the biggest producers, several of whom are sold out for the next three years, have a lot of padding to absorb price declines. Smaller companies may be in a different situation.

Also, keep in mind that those margins are 2Q numbers – they may have fallen in Q3. My point is that these segments of the larger companies were doing fine while the wafer, cell and module producers crashed.

As for writing something for this site, please contact me at christian_roselund@solarserver.com to discuss this further.

By: Anonymous

Anonymous — Sat, 19 Nov 2011 21:58:00 +0000

That’s a very informative article Christian.

Might you be interested in writing up a more general summary article for this site? Something for a more general readership.

And, do you see polysilicon prices holding as high as they are or is there now enough competition in the market to bring down margins?

By: Andreas Hutterli

Andreas Hutterli — Sat, 19 Nov 2011 18:32:00 +0000

Zach please compare apples with apples and in which year they were collected. 2008 was exceptionel. Real estate and airline margins aren’t below zero in general.
On the other hand, why you selected Canadien Solar? Is that a representative company? I would prefer some average numbers of the solar industry.
The amazing growth rates must be financed. That is the main reason why the margin were higer than in industries with no or slower growth.
But I still like the article because it shows that there are economical reasons why solar has and will become a cheaper energy source. We will see how margins, growth and demand will affect each other.

By: Nodisclose

Nodisclose — Sat, 19 Nov 2011 16:51:00 +0000

I think you’re confusing operating margin and gross margin. That list is operating margin.