EUGENE, Oregon. An executive setting up a North American sales and marketing arm for 30 of China's solar panel makers says he has landed big deals despite projections of a market shakeout.
Centron Solar (Eugene, Ore.) has sold solar panels to Nike and the National Guard and aims to set up as many as six panel assembly sites in the U.S., said Ocean Yuan, president of the company that has been in business just since June 1.
Centron represents 30 companies in China that make panels, solar cells and their components. The private companies based in Jiangsu and Xiejiang provinces have an installed capacity of 500 Megawatts, Yuan said.
"We want to be the number one producer of solar panels in the world," said the young executive, sitting in a small conference room of a still-empty warehouse where a handful of Centron workers have offices.
President, Centron Solar
Centron aims to sell panels direct to installers for $2.48 per Watt compared to $2.80 to $4 per W for competing modules. "We're like a Walmart, said Yuan who previously worked for electronics distributors and contract manufacturers.
Price pressure has already reached extreme levels and China may become ground zero of an industry shakeout, according to DisplaySearch which recently released its first report on the solar market.
"Despite module demand shrinking 17 percent in 2009, so much cell manufacturing equipment was ordered and installed over the past year that capacity is still expected to grow 56% this year," said Charles Annis, vice president of manufacturing research at DisplaySearch and author of the report, speaking in a prepared statement.
Between January 2008 and July 2009, approximately 11.4 GW of new solar cell capacity was installed worldwide. A third of all production is now done in China which ramped its capacity starting in 2005, he added.
Indeed Yuan said Centron's partners hope to double their capacity to a GW by sometime in 2010. Meanwhile Spain and Germany, big drivers for worldwide demand, are ending and scaling back subsidies, respectively, he noted.
Thus vendors are "currently experiencing an enormous over-supply that is causing rapid price erosion and potentially setting the stage for the failure of multiple cell manufacturers," said Annis, adding he anticipates demand recovery next year.