Solar Panel Manufacturing in the US Industry Market Research Report from IBISWorld has Been Updated

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The sun will continue to shine favorably on solar panel manufacturers, with continued government subsidies and increasing renewable-energy demand encouraging downstream consumers to invest in this industry's products. For these reasons, industry research firm IBISWorld has updated a report on the Solar Panel Manufacturing industry in its growing industry report collection.

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Government incentives domestically and in Europe boosted industry revenue

The Solar Panel Manufacturing industry has experienced a rapid rise and fall over the past five years. “Generous government incentives for downstream customers fueled strong growth early on,” explains IBISWorld industry analyst David Yang. “Tax credits reduced the cost of solar panels, making them more affordable for consumers and businesses.” In addition, rising coal and gas prices have also improved solar power's competitiveness against traditional electricity generators. But as silicon prices fell, international manufacturers were able to pump out large quantities of low-cost solar panels, increasing competition with the US industry. Consequently, solar panel prices plummeted in 2011 and revenue deteriorated, falling 21.6% in 2011 and an expected 32.5% in 2012. As a result of the contrasting trends over the past five years, revenue is estimated to fall at an annualized rate of 3.9% to $823.1 million in 2012.

From 2007 to 2010, Solar Panel Manufacturing industry operators benefited from federal government tax credits, which allowed manufacturers to expand production and develop new products. Additionally, state renewable portfolio standards strengthened demand from the downstream Solar Power industry (IBISWorld report 22111e). The manufacturing industry also benefited from European incentives for solar power, which bolstered exports. “These trends reversed in 2011, though,” says Yang, “when the domestic market was saturated with cheap solar panels, mostly from China. As a result, solar panel prices deteriorated, causing revenue to collapse.” This was further exacerbated by the European debt crisis, which reduced international demand for US-manufactured solar panels. Low solar panel prices also cut into industry profitability, causing firms to exit this industry. Many firms also went bankrupt in the face of competition, with Solyndra as the most high-profile case. As firms have exited the industry, market share concentration has been increasing. Growth in concentration may be short-lived, though, with major companies SolarWorld and First Solar continuing to restructure and downsize domestic manufacturing operations. For example, First Solar is focusing efforts on power plant engineering, design and construction services. Over the next five years, more industry firms are anticipated to scale down manufacturing operations due to international competition. Consequently, market share concentration is forecast to fall.

In the next five years, this industry will continue its decline as unprofitable firms exit the industry. Government incentives will slightly mitigate falling revenue; recently enacted trade tariffs will also slightly reduce competition from imports. Nonetheless, domestic firms will still have difficulty competing on manufacturing cost against their Chinese counterparts. Consequently, industry firms are anticipated to restructure operations to focus on solar power plant design and construction or high-tech, high-efficiency panels that are superior in quality to imported solar panels. For more information, visit IBISWorld’s Solar Panel Manufacturing in the US industry report page.

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IBISWorld industry Report Key Topics

This industry manufactures solar panels and solar cells and sells these products to solar panel installers and downstream residential, commercial and utility customers. This industry does not include American firms that manufacture solar panels abroad.

Industry Performance
Executive Summary
Key External Drivers
Current Performance
Industry Outlook
Industry Life Cycle
Products & Markets
Supply Chain
Products & Services
Major Markets
Globalization & Trade
Business Locations
Competitive Landscape
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
Major Companies
Operating Conditions
Capital Intensity
Key Statistics
Industry Data
Annual Change
Key Ratios

About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.

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Gavin Smith
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