US and Global solar install predictions for 2013
This being the beginning of the year I always like to make a few predictions about the future of the solar industry. Let me start with the global picture by saying my prediction is PV solar will continue being a growth industry. The growth will be surprising large and we will see PV costs leveling off by the end of the year and pricing maybe even move up above the present low. This price leveling off if not by the end of the year, it will take place very early in 2014 which will be beneficial for the entire solar industry creating stability in PV manufacturing. I still see other technologies and BOS cost moving downward in pricing helping the solar industry to get continually closer to grid parity.
The reason for the leveling off of prices for PV is related to a couple of events taking place. First, silicone prices have risen recently on a couple of occasions and with source material slightly more expensive manufacturing costs go up. Then as we know most solar manufactures are on muddy ground sinking deeper by each sale. Jinko Solar's situation is different. They are continually recognized by global analysts as the low price leader. At least there is one tier one PV manufacture that is insulated from these losses, Jinko Solar.
Saving cost by buying silicone correctly
So how has Jinko Solar cushioned itself from the financial problems presently becoming apparent within PV manufacturing? Their ability to buy silicone better than their competitors which has its roots from the Chairman who was in the silicone spot market trading silicone before starting Jinko Solar. Additionally, Jinko's manufacturing costs are lower because they control their vertical market producing their own ingots, wafers, cells and modules. Then to save those last few cents they manufacture their own frames and junction boxes along with having one of the most automated PV manufacturing plants in China.
Most of the tier one manufactures are still using humans to construct their panels and buying one or more of the processes from other manufactures. Jinko's blueprint for manufacturing is now being copied by many of the tier two and three manufactures. This means they are the most likely to be successful and make it through the consolidation of PV manufactures. It also means they recognize what has assisted Jinko Solar in their success and it is having the best balance sheet among their peers.
3rd Party Insurance
Even companies like Yingli has had to follow the lead of Jinko by purchasing 3rd party insurance because based on balance sheet alone their bankability is questionable. Soon there is a great possibility SunTech and Trina will be purchasing third party insurance because of the issue they are experiencing with their balances sheets as well. I believe there will be major shake ups throughout the entire solar manufacturing industry, which is presently taking place and will be taking place throughout 2013 and 2014.
US and China install solar projects above predictions
When you consider that China has moved their prediction from 3 GWs around a year ago for 2013 to a recent plan of 10 gigawatts (GWs) to be installed in China we can expect serious growth in the solar industry and reduction in the supply. Then I predict that the US will do up to 5 GWs probably around 4.5 GWs in 2013. Now this is at least 300 megawatts (MWs) above other predictions. The question is why? Every year the analysts take a stab at predicting and every year their predictions are lower than actual Megawatts installed. With Financing opening up and other power markets weakening this is the natural effect.
The analysts are looking at all the roadblocks that are in the solar industry's way so they naturally downgrade the expected megawatts installed. With my 8 years in the industry I have experienced all the roadblocks and each time the solar industry finds a way through, over, under or around the blockades. This reality keeps me more positive about our industry.
With an increasing number of private investors and institutions including funds that have entered the financing of solar projects the growth is staged properly for major growth. Plus, there are many projects that did not get built last year because of one problem or another. I believe 40% of these projects will now get completed. As more investors learn and trust the long term returns that a solar project pays it is only natural for them these investors to enter the solar space.
In Summary
Please note I work for Jinko Solar and many of you already know I almost never write anything about Jinko. The reason I do not write about Jinko is it seems like advertising, but in this case I am stating my belief about the upcoming future of the PV solar industry and Jinko is staged to be a major winner in the US and Globally markets.
Contact me at: robert@jinkosolar.com or 916-284-8841.
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