Global shift in solar industry will benefit downstream players

solar installersAs the global solar industry shifts and manufacturers struggle through bankruptcy, Germany’s downstream companies are sitting pretty.

The solar industry is shifting from one based on government-subsidies to a self-sustaining market, which has both caused and relies on downward pressure on panel prices. That’s put panel manufactures around the world in tough spots, said Tobias Rothacher, solar photovoltaic spokesman for Germany Trade and Invest. “For manufacturers, you have to have scale or you are out of business,” Rothacher said.

Second-level investors are swooping in and picking bankrupt solar companies up at bargain basement prices. It’s just part of the natural evolution for an industry, Rothacher said. “This is the same as what happened in the computer industry, generally we look at this development as very positive.”

It’s a painful shift to make for manufacturers and it’s not all that easy for downstream players right now either, Rothacher said.

Even without government incentives, there is tremendous opportunity and profit available to German companies working in the downstream solar space.

“The question is, who will make a profit on this?” Rothacher said. He suggests solar installers and people on the service end will continue working, continue making profit and will see their businesses grow as the public adjusts to a solar market without subsidies.

“We are just at the start of this transition from power producer to user,” Rothacher said. Instead of companies building major large-scale utility solar arrays, they will be installing smaller rooftop systems for home and business owners, which will ultimately led to more business for downstream operators than they saw with the big projects.

“Germany has a lot of downstream companies compared with some other countries,” Rothacher said. China, will struggle with the transition for manufacturers and the country has not concentrated on building its downstream supply chain. Germany has several operators who are working there. In fact, much of China’s downstream market is outsourced.