How strong the price pressure is shows the example of Q-Cells SE (Bitterfeld-Wolfen): In Q3, the company increased the unit volume sold by 87 percent to 103 MWp. The sales figure of €184 million (about $274 million) however increased only by 30 percent over Q2; for the first nine months of the year revenues even declined by 41 percent compared to the same period last year. The company blames the strong price deterioration in the international solar cell markets for the sales decline.

On this sales the company wrote an operative loss of €163.8 million — for the first nine months the losses amount to € 945 million and thus almost a billion euros. Adjusted by restructuring and other one-time charges, the company still wrote an operational loss (EBIT) of almost 5 million euros.

At the opportunity of presenting the quarterly figures, Q-Cells provided details regarding a cost-cutting program announced already in August. The most prominent item is a headcount reduction by 500 persons — roughly 25 percent of the staff will have to leave by the end of the year.

Hamburg-based Conergy AG fared similarly bad. It saw its Q3 sales decline 14 percent against Q2. Against the same quarter in 2008 sales even fell by 40.3 percent. The company which produces and sells crystalline solar modules and inverters now achieved sales of €140.2 million (about $209 million). On this basis, it wrote a net loss of €20 million. Anyway, Conergy managed to reduce its losses; in Q3/2008 it almost had drowned in red ink at a loss of € 77.5 million.

The situation could continue to deteriorate. At least, this is what Robert Castellano believes, president of market researcher The Information Network. In a study he paints a gloomy picture of the industry's situation. According to Castellano, the ongoing contraction process will not peak before 2010. The market researcher predicts that as many as 50 percent of the solar manufacturers won't survive. "The freefall has begun," he said.

Castellano cites a number of examples. General Electric, for instance plans to close its only US solar panel factory. BP Solar is in the process of winding down its solar panel factory in Maryland and outsource it to a contract manufacturer, to name just the most prominent ones.

Chinese companies continue to increase inventory and thus increase the price pressure, Castellano warned. "Perhaps this is an attempt to become the worldwide leader in the solar market by eliminating the competition," he said.

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