By Kari Williamson
The analyst adds that the failure of Solyndra is “a warning to all other PV module start-ups”, as Solyndra becomes the third solar photovoltaic (PV) manufacturer to fold in the space of a month.
“Despite Solyndra operating its 110 MW facility close to full capacity in recent months, we estimate that its manufacturing costs still far exceeded the price at which it had to sell its modules at in order to make an investment case for its customers,” comments Senior Research Analyst, Sam Wilkinson.
“It was losing money fast, and for that reason the closure really comes as no surprise. Whether further capacity expansion, increased production and a few more years of technical advancements could have changed the situation is debatable, but now we will never know.”
Recent IMS Research statements show that Chinese module suppliers have strengthened their position in the solar PV market, that the market is showing signs of consolidation, and that competition is only going to get more intense.
The PV module industry has suffered from oversupply, which has led to fierce price competition with average prices dropping by around 20% in a single quarter, the analyst says.
A warning to thin-film start-ups
Solyndra’s failure could be seen as a warning to the large number of other thin-film solar PV start-ups that have recently emerged:
“Whilst Solyndra’s product was different so that it cannot be simply considered alongside other CIGS modules, it demonstrates the need for smaller companies to reach scale and volume quickly in order to compete,” Wilkinson says.
“All PV module manufacturing, and CIGS in particular, relies on scale to reach attractive cost levels, and any supplier currently producing in relatively small volumes is at an instant disadvantage compared to the GW-scale manufacturers that are currently dominating the market.”
This has been highlighted by fellow solar PV thin-film innovator, Uni-Solar, which says its manufacturing cost more than doubled to US$3.40/W in Q2’11, when it temporarily reduced production of its flexible modules by almost 80%.
Political consequences
Solyndra's failure does not only affect the solar PV community, but will “certainly have political consequences”, IMS Research predicts.
The company was awarded a US Department of Energy (DoE) loan guarantee amounting to over half a billion dollars, which was already considered controversial after it closed its first fab and cut jobs in 2010.