re: 2011: Return of the Solar Shakeout
seekingalpha.com
Key points, IMO:
1. The 2008-9 shakeout was not sufficiently severe, to drive out excess capacity and high-cost producers.
2. Surprisingly high demand growth is being met by even faster supply growth, so overcapacity has worsened in 2009 and 2010.
3. The survival of high-cost producers, is dependent on low-cost producers being capacity-constrained.
4. Low-cost producers (FSLR, YGE, TSL, STP, in that order) can't remain capacity-constrained forever.
5. Better "bankability" gives an advantage, to the products of older solar companies, because they are better known and have a longer track record. That's true even if they are higher-cost. But that advantage is only temporary.
6. "the unrelenting, prolonged shakeout that was originally predicted for 2009 seems increasingly likely to manifest itself beginning in early 2011"
Although I have posted similar reasonings and conclusions, I'm not so sure he's right. All the low-cost producers have said, they will be capacity-constrained through end-2010. So, early 2011 is the very earliest this scenario could play out. But it's also possible, they remain capacity-constrained, all the way through 2011 as well. That would push the shakeout into 2012. |
