According to reports, the global solar prices have dropped drastically in the past few quarters and the industry which is in turmoil lately is set for a major consolidation, according to Mr James (Jim) G. Brown, President, Utility Systems Business, First Solar.
The industry is in a “state of turmoil” due to lower demand and drop in prices. There has been a forced price reduction due to drop in supply side demand. This has meant aggressive pricing which will lead to consolidation in the sector. Therefore, buyers need to be cautious, he said.
Speaking at Solarcon India 2011, Mr Brown said this is a good time to be in solar module business as there is tremendous potential globally and in India, in particular. There is great alignment of interest, that is the need for the country to set up solar plants and the Government’s strategic policy initiatives and keen interest by developers and all stakeholders to take up projects.
The prices of solar project inputs have drastically come down after reaching highs few quarters ago mainly driven by demand from European countries. There is large scale and capacity in place and lower demand from some markets. This has resulted in grid parity which has resulted in the developers’ ability to set up utility grade projects.
“We are in the ground floor of a very tall building,” Mr Brown said, referring to the upsides in the solar industry.
Citing the example of a 555 MW solar farm coming in the US, which is a multi-billion dollar project, he said that this was something which would have been impossible to conceive few years ago. The lower cost and scale only shows that it won’t be long before solar projects would be on par with generation costs of other fossil fuels, he said.
Incidentally, First Solar, which produces photo voltaic modules based on thin film technology, is already an active player in India. It has won orders for the supply of modules worth 200 MW.