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Investors Conference 2009: Journey into the unknown
March, 2009: The world’s largest solar companies are far from united about how the photovoltaic market will develop this year. That was one of the main takeaways from PHOTON’s 4th Photovoltaic Investors Conference held on March 5 in Munich.
Anton Milner, CEO of the world’s biggest cell producer Q-Cells SE and one of nearly 30 manufacturers, financial analysts and industry observers to give presentations, expected the worldwide solar module market to grow about 50 percent this year to 7.5 GW.
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© Ronald Frommann / photon-pictures.com
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What will happen to the PV market in 2009? That is something that not only the participants in this year’s conference would like to know.
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“Photovoltaics has never, ever in it’s life been a better investment,” he told the audience of several hundred.
But Jens Meyerhoff, the chief financial officer of the world’s leading thin-film module manufacturer First Solar Inc., predicted a market of between 4.5 and 5.5 MW in 2009. Erik Thorsen, CEO of Norway’s vertically-integrated REC ASA, while characterizing the long-term fundamentals of the industry as “strong,” was more reserved in the short term due to the credit crunch. “Tell me how much capital is available,” said Thorsen, who expects module prices to fall about 15 percent this year, “and I’ll tell you how big the market will be.” Philipp Koecke, the chief financial officer of SolarWorld AG, believes the PV industry will find it impossible to get the estimated €20 to 30 billion ($25.3 to 38 billion) in financing needed over the next two years. ”My experience is that the capital market is completely closed.” Koecke, who estimates the 2008 market at just 3.5 GW, thinks a 2009 market of 6 to 7 GW is possible, but not the 15 GW that PHOTON Consulting is forecasting.
There was general consensus that the solar industry is currently facing a considerable overcapacity. Sunil Gupta, managing director of Morgan Stanley Singapore Pte. Ltd., who is only estimating a slight increase in shipments to 5.5 GW in 2009, calculated a 2008 worldwide inventory along the value chain from polysilicon to modules at 2.8 GW. At a normalized level, he predicted that the industry is looking at an inventory excess of about 1.4 GW over the next two years.
But while the natural consequence of falling modules prices would seem to bode well for market growth, it may not translate into as big a jump as some expect. Rob Stone, a financial analyst from Cowen and Company LLC, describing himself as one of the “solar bulls” in the past, noted that just when the supply issue looked to be easing, it has been overtaken by “the peak” of the financial crisis. “And one thing that seems obvious in the last few months,” he warned, “is that you don’t get price elasticity without credit.”
Which is undoubtedly why most of the companies at the investors conference seemed to make a point of emphasizing the crucial importance of maintaining good cash reserves to ensure continued business health – if not survival.
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