Global solar cell and module makers are expected to see their net profit margins rebound to an average of 20 percent in the first half of this year, helped by falling costs and rebounding demand, market researcher DisplaySearch said in its latest report.
Rising government initiatives on using green energy, solar installation, especially, in Europe, Japan, the US and China, would help boost demand for photovoltaic installments up 40 percent annually this year, the Austin, Texas-based researcher said in the report dated Dec. 31.
The net profit margin would represent a significant rebound from minus 5 percent in the second quarter of last year, the report showed.
PHOTO: BLOOMBERG
DisplaySearch also expected the level for the whole year would hover around 20 percent, higher than an average 15 percent during the 2006 to 2008 period.
With growing demand and falling costs, the solar industry should expect a buoyant outlook this year, DisplaySearch said in the report.
The German government’s plan to further decrease the feed-in tariff (FIT) would be an important indicator for continuing growth, DisplaySearch said.
Some people may rush to install solar panels before government subsidies are reduced, DisplaySearch said.
The FIT is a mechanism by which the government offers a guaranteed purchase price for electricity generated from renewable energy sources over a fixed long-term contract, typically 15 years.
Growing demand would also provide a boon to Taiwanese solar cell makers. Shipment values may expand 15 percent this year to US$4.15 billion, from US$3.6 billion last year, Taipei-based research house Topology Research Institute (拓墣產業研究所) said.
Topology said local solar cell makers could lag behind their global rivals in landing new orders because of smaller scales of operation.
To meet rebounding demand, Taiwanese to solar cell maker Motech Industries Inc (茂迪) planned to expand production to nearly 1 gigawatt this year, from 600 megawatts last year.
Motech’s net margin improved to minus 4.5 percent in the third quarter of last year its low of minus 7.8 percent in the second quarter.
DisplaySearch expected the price of key raw material polysilicon to extend last year’s downtrend this year because of oversupply, helping solar cell and module makers reduce costs.
Polysilicon accounts for between 15 percent and 20 percent of the overall cost in producing a solar module, the researcher said.
Shares of Motech almost doubled to NT$152 (US$4.8) in the final quarter of this year, from NT$87.8 on Sept. 30, on improving industrial prospects.
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