UAE solar market reflects global oversupply

Jit Chakravarty.

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A new research white paper on the global solar industry warns that “the solar market is now faced with "a gross oversupply of modules.”

Pike senior analyst Dave Cavanaugh said: “The industry is currently supplied by more than 190 cell and module manufacturers, making consolidation of weaker competitors an inevitable outcome."

Overcapacity and intense competition will create downward pressure for module average selling prices (ASPs), which will accelerate grid parity for the cost of solar-produced power to the 2013 timeframe in many markets.

Increasing competition is also a feature of the burgeoning solar-energy market in the UAE, where there are over 50 vendors at present, according to Eurostar divisional manager: solar Jit Chakravarty.

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Challenges include a long supply chain: “We need to have a stronger local supplier and manufacturing base. We are also competing with operators who, in the absence of any required standards, offer under-designed products,” said Chakravarty.

According to the new white paper from Pike Research, while solar demand will experience strong growth this year, the oversupply factors have had a strong influence on which companies will lead the industry in 2010 and beyond, and which will face low profit margins and possible consolidation.

The report also finds that solar market demand will exceed 19 GW by 2013, a 25% compound annual growth rate (CAGR) from 2010.

Worldwide solar demand, driven by lower costs and greater availability of credit, will increase to 10.1 GW in 2010, a year-over-year increase of almost 43%.