Solon is the latest victim of the profitless prosperity in solar.
The German company, which makes solar modules and solar power plants, will shut down its 60-megawatt module manufacturing facility in Tucson by October, resulting in the loss of around 60 jobs. Solon will continue to employ 70 or so in engineering and sales in Tucson. The facility only opened in October 2008.
In Germany, Solon may cut 265 of 805 employees, according to Die Welt.
The cutbacks are part of an aggravating trend for solar manufacturers. Unit shipments and sales are up for many manufacturers, but prices are declining even faster. Q-Cells, the once-mighty cell maker, saw revenue grow to $450 million in the second quarter (versus $178 million in the previous quarter). The company, however, suffered a loss of $439 million. First Solar came in lighter than expected in the second quarter and trimmed revenue estimates for the second half.
Evergreen Solar, meanwhile, filed for Chapter 11 reorganization earlier in the week.
The culprits: excess inventory, module prices that have plummeted to $1.40 and less, inexpensive manufacturing techniques in China, and policy uncertainty in Italy, Germany and the U.S. You can also add to that the fact that solar modules tend to be somewhat generic and only recently have module manufacturers begun to invest in brand advertising to help differentiate themselves from competitors. Lower natural gas prices and the challenges of getting affordable financing also loom large.
Ironically, Asian companies, and particularly Chinese companies, are mostly known for their inexpensive manufacturing, but they have also been some of the most active in coming up with ways to stand out in a crowded market. Yingli sponsors sporting events. Most of the customers of Innovalight, which makes an ink that boosts efficiency, come from China. AUO from Taiwan will be one of the first to come out with AC modules containing integrated microinverters from SolarBridge Technologies. TSMC (Taiwan) and TFG Radiant have invested in CIGS.
There are some bright spots: SunPower, among others, said that the inventory hangover in the second half is clearing up and some of the policy ambiguity has been straightened out. Germany, in the long term, might even be more attractive now that it has set out a plan to go nuclear-free.
Still, in the meantime, expect some gear grinding. Other module facilities may go on the block. In turn, equipment vendors could see their sales get dented as these corporate garage sales take place.