The number of bearish solar analysts have been growing lately, with many of them concerned about supply rapidly outpacing demand for 2011. However, I’d have to agree with Motley Fool-- that if you believe anything the CEOs of the solar companies are saying-- demand will continue to be strong.
Granted, many of these solar firms are continuing to ramp capacity at an extraordinary pace, which exposes them to significant risk. I’m probably somewhere in the middle. I don’t see a potential Armageddon situation as Axiom Capital sees, but I do think we’ll continue to see the cream of crop rise to the top along with some consolidation in the industry, which really hasn’t taken place so far.
Comments from solar CEOs:
First Solar (FSLR) said the majority of its production has already been sold for 2011.
JA Solar (JASO) has agreements and received prepayments from customers for 1.2 GW of its 1.35 GW to 1.45 GW of capacity for next year.
At Sunpower (SPWRA) the CEO Tom Werner says “demand is greater than the supply” and the North American commercial business is “70% booked for 2011.”
This week, Suntech Power (STP) said analysis of customer demand saw “it was 30% above our ability to supply for the entire year.”
Disclosure: No positions