Abstract
Increased Volumes to Help Manufacturers Reduce Costs and Stay Competitive
In a market threatened by cheaper Asian imports, producers of solar power are
looking to cut costs through mass production, greater automation, new
technologies, and improved efficiencies. These moves are necessary to keep the
market growth rate stable at 20 to 25 percent, especially if companies are
looking to compete against regular electricity prices. Producers have to focus
on a few applications in specific areas and increase production volumes in those
instead of spreading themselves thin over numerous segments. Smaller companies
could license their technology to foreign enterprises to remain viable.
This Frost & Sullivan research studies the different technologies
currently in the North American solar power market and examines their potential
to reduce cost and compete effectively. The study also discusses prevailing
market challenges and gives strategic recommendations on how best to enter this
market. The market is broadly segmented by technology into photovoltaic (PV) and
concentrating solar power (CSP).
Subsidies and Renewable Portfolio Standard to Boost Installation of Solar
Energy Systems
The U.S. Government, utilities, and citizens have become increasingly
conscious of the need for renewable energy sources with the huge power outage
experienced in the East Coast and the dependence on foreign oil reserves. These
deficiencies have highlighted solar power's reliability as a local, on-grid, and
renewable energy source. With subsidies, renewable portfolio standards (RPS),
tax credits, net metering, and buy-down programs, the government hopes to
provide enough incentives to make this a fast-growing energy market.
Government subsidies will facilitate mass production and, thereby, drive
prices down sooner. Subsidies will be necessary for another three to five years
until solar power can compete with more common energy sources such as natural
gas or oil. "Since solar energy is considered by many as the renewable
source that meets RPS requirement, several states are expected to adopt the
standards. This will lead to greater installation of solar energy systems,"
states the analyst.
Solar Power Industry to See Further Consolidation
The significant demand for solar power is expected to lead to overproduction.
The already intense competition is likely to build up further and more mergers
and acquisitions are anticipated. However, entrants with innovative technologies
will have a chance to hold their own against the established participants since
customer preference for new and more dependable energy will result in quicker
return on investments for the former.
"Many oil companies increasingly see themselves as energy companies with
several big participants having acquired solar power manufacturing companies and
establishing themselves in the market," states the analyst. This interest
in the renewable energy market could also be an attempt by oil companies to
create or improve their image as environment-friendly organizations.
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