Tax credits for solar power generation will heighten industry demand
Los Angeles, CA (PRWEB) April 29, 2012
The Solar Panel Manufacturing industry has experienced sunny days during the past five years. Generous government incentives for energy product manufacturers and downstream solar power generation firms have buoyed revenue. Downstream solar power generation firms buy solar panels from industry operators. According to industry analyst Justin Molavi, “without government subsidies, solar power generation firms would have a hard time competing against traditional energy-generating sources.” With incentives in place, downstream customers are demanding solar panels at an increasing pace. Furthermore, falling silicon prices have enabled US manufacturers to compete with low-cost manufacturers abroad. As a result, industry revenue is anticipated to grow at an average of 29.0% annually to $4.1 billion in the five years to 2012, with a 5.0% increase expected in 2012.
A growing market for solar worldwide has resulted in industry expansion. Countries like Germany, Spain, Italy and China have taken a proactive approach to renewable energy by enacting legislation that provides healthy incentives for solar power producers. Molavi says “this trend bolstered global demand for solar panels and products.” US producers have stepped up to the plate and exported solar panels and cells to buoying markets abroad. However, these trends have begun to reverse. Many European countries that are facing debt crisis have pulled back on renewable energy incentives, hurting the industry's growth prospects. Additionally, US producers still compete with low-cost solar manufacturing in China, resulting in heavy price competition among global players. These trends caused some industry players to exit, as they found it hard to compete with low-cost panels and shrinking demand from Europe. The most dominant firm in the industry is SunPower, but Suntech Power Holdings, First Solar and Sharp Corporation also hold market share.
During the next five years, the Solar Panel Manufacturing industry will grow on the back of continued government subsidies provided for solar power generation. Tax credits for solar power generation and investment into solar power projects are set to expire in 2016. This factor provides the basis for downstream customers to invest in generating power from solar, creating strong demand for solar panels. Low-cost production from China will weigh on industry revenue, since these players can undercut US players by offering lower prices. This trend will cause revenue growth to slow in comparison with the previous five years. Nevertheless, revenue is projected to grow steadily during the five years to 2017.
For more information visit IBISWorld’s Solar Panel Manufacturing in the US industry page
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This industry manufactures solar panels and solar cells and sells them to downstream customers. Firms in this industry also manufacture intermediate products that are necessary solar panel components, which may be sold separately or integrated into the solar panel at the time of production.
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