Global solar industry dominance to stay with China. A chaotic consolidation, fraught with uncertainties, will still provide new opportunities in the Chinese market for new investors and global firms, Lux Research says.
“Enormous oversupply and heavy debt have set Chinese solar manufacturers up for consolidation,” said Zhun Ma, Lux Research Analyst and the lead author of the report titled,
The Great Shakeout: China’s Path to a Rational Solar Industry.” “The road ahead will be strewn with chaos and uncertainties, but the consolidation will draw a new solar landscape in China that still dominates the global solar industry.
Lux Research analysts studied the Chinese solar industry to understand which firms can survive the ongoing shakeout. Among their findings:
Tier-one firms like Yingli, Trina to benefit from consolidation. With the likely disappearance of numerous low-tier companies, Chinese tier-1s such as Yingli, Trina, Hanwha SolarOne and Canadian Solar can grab domestic market share as China becomes the world’s largest solar energy consumer market.
Local partnerships key to global companies. Non-Chinese players can target the large Chinese market by partnering with local companies, as First Solar has done with Zhenfa, or take stakes in domestic leading players as SMA has done. Top materials suppliers will also vie for supply deals with the precious few high-volume manufacturers that survive, as DuPont has with Yingli.
Chinese firms become technology leaders. While China’s solar success is often seen as driven by cheap labor, in fact top Chinese solar manufacturers increasingly boast world-class technology. Non-Chinese players like SunPower and SolarWorld now need to innovate in areas including metallization, cell architectures and kerfless wafering to keep up.
The report, titled “The Great Shakeout: China’s Path to a Rational Solar Industry,” is part of the Lux Research China Innovation Intelligence service.
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Gordon's expertise in the area of industrial energy efficiency and alternative energy. He is an experienced electrical engineer with a Masters degree in Alternative Energy technology. He is the co-founder of several renewable energy media sites including Solar Thermal Magazine.