(Picture credit: EMA)
CEOs and senior executives of leading solar panel companies agreed that the industry would need to be more competitive and efficient if it were to lift itself from its current doldrums.
In recent years, the industry has been affected by overcapacity and is undergoing a painful stage of consolidation. This is been due, in large part, to a huge disparity between manufacturers' costs and current market prices. Global manufacturers had been selling their products at below their variable costs" said V Saibaba, CEO of Lanco Solar.
Cai Zhifang, CEO of China Sunernergy, said that while companies would do well to focus on lowering the real cost of solar PVs, they also needed to keep an eye on improving the quality of their solar PVs though competition within the industry. This would help solar power reach grid parity, he said. Coupled with lowered costs, this would also give governments a stronger incentive to support solar power when they review their total portfolio of available energy sources.
The current situation was also due to the high cost of solar power projects, and the panellists agreed that capital markets need to be mobilised. To do so, Alessandro Perotta, Executive Vice President of Solar & Systems at REC Group, said governments need to have clear renewable energy policies so that investors will know where to invest and what returns to expect.
But what the industry requires is also a lighter touch when it comes to government intervention, said Dr Shi Zhengrong, Chairman of Suntech Power Holdings, including non-tariff trade barriers such as equipment subsidies and the requirements for local content.
"Solar PV remains a capital-intensive industry. Investments of tens of millions of dollars are required to build a factory in a county. Only modular manufacturing can be done next to where the customers are," he said.
Foreign companies could be the technical experts, concluded China Sunenergy's Cai.
By :Irina Mehta, INSEAD