December 23, 2008 – Cleantech Group best of the web pick

Some installers and developers snatch up panels at bargain prices, while credit crunch limits others’ participation.
The cost of solar panels in dropping in Europe thanks to a growing inventory languishing in Spanish ports, according to Clean Technology Insight.

Some project developers aren’t making payments for panels they’ve ordered, leaving manufacturers along the supply chain such as Germany’s Q-Cells with extra inventory (see Bad news from Q-Cells spreads through solar supply chain). Other manufacturers such as SunPower are lowering earnings projections because of the rise of the dollar against the euro, in which contracts are signed (see Dollar’s strength hurts SunPower).

The availability is driving down prices; however, the tight credit market is leaving some firms without funds to buy the overstock, even at discounted prices. Some installers and developers are finding the cash to snap up the supplies for bargain prices.

Crystalline silicon panels, which cost about €3.50 a watt a few months ago, are now being offered for €2.10 to €2.70 per watt.

“We receive an offer every day now to rescue large consignments of modules tied up in Spanish ports. It seems like mayhem over there,” said Joseph Deignan, CEO of OptieEnergy Group, a Bulgarian solar developer, to Clean Technology Insight.

The problem in Spain is compounded by high feed-in tariffs earlier in the year that drew new players to the market from sectors such as real estate. The government scaled back the tariff in September and is now investigating fraudulent claims for incentives that are potentially so widespread that they could make up the country’s entire 500-megawatt cap next year.

“As a result of this bonanza of greed that occurred in the Spanish region pre-Sept. 28 and the fraudulent project developer activity, we could see these fraudulent solar farms take up the entire 500 MW cap next year given the new scope of the investigation. This would lead to no new shipments into this key region of demand,” wrote Jeff Osborne, an analyst at Thomas Weisel Partners.

In 2009, the solar sector’s growth will likely be less than previous years but still in the 15 percent to 20 percent range, Clean Technology Insight reported.