How does the photovoltaic sector react to the financial crisis?

VEND consulting regularly analyses the current trends and developments in the photovoltaic industry. The current study, published in the beginning of 2010, surveyed 113 companies of the areas of production, trade and service providers in the photovoltaic sector. The study demonstrates that the financial crisis also affected the solar industry, which was used to double-digit growth rates. How does this affect strategies and numbers?

The low willingness to invest resulted in significantly lower sales figures in the photovoltaic sector at the beginning of 2009. Although the sales figures stabilized at the end of 2009, the built up excess capacities put massive pressure on prices, therefore lowering the profit margin significantly. To reduce those excess capacities, producers and traders intensified their sales activities. 68% of the surveyed traders and 60% of producers stated they intensified their sales activities in reaction to the crisis.
Both traders and producers see possible savings mainly in optimizing their purchase de-partment. Optimizing potential lies mainly with payment conditions (e.g. lengthening the terms of payment) and in achieving lower prices. Producers are mainly changing from long-term contracts with their suppliers towards short and mid-term contracts. These contracts have been closed at high prices to secure resources for future production in times of a silicium shortage. But, as there is enough silicium since a few months and silicium is used sparely in modern production, prices have fallen accordingly. Nevertheless, many producers are bound to the highly priced purchase commitments, resulting in a higher optimizing potential.
Besides the purchasing optimization, activities which increase internal efficiency are high up the agenda to save costs within the company. Especially producers try to invest the released re-sources into research and development to improve their competitive position in a sustainable way and emerge with strength out of the crisis. Despite the markets indicating an intensive price war, only 30% of the surveyed companies react to the crisis with lowering their prices. A close examination demonstrates that particularly producers hesitate with price reductions. Traders react significantly more often with price reductions, pointing towards lower profit margins in the future.

The future price development stays contested. Experts expect that in the future producers are forced to lower prices which will benefit the end costumers. This will most likely reduce the time the sector needs to achieve grid parity. Reducing costs and staying innovative is a challenging task ahead. ‘Placing innovative products on the market is the only way to secure survival’, says Dr. Alexander Brem, Managing Director of VEND consulting.

VEND consulting GmbH is a market-oriented consultancy, which does not only deliver but also im-plement consulting efficiently to the point from a process oriented perspective. The aim is the im-plementation of both efficient and effective processes to generate sustainable competitive advantages.

The company and the brand VEND signify innovative techniques and scientific methods in the areas of strategic Business Development & Finance, Customer Services and Process and Project Manage-ment.

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This release was published on openPR.