l'Actualité du Solaire

In the past, assembly companies had intellectual property, which provided them with a barrier to entry. A decade later, progress has been so rapid in product design and installation that the current period is one of

diversification and integration.

The price of fixed-tilt systems has fallen from $0.25 per watt peak to less than $0.07 per watt peak, due in part to volumes, global supply, and product innovation : significant wind tunnel investments have been made to reduce wind resistance and to reduce the amount of steel used. The orientation of the panels, pre-panelling, design of piles, legs, etc. have also been studied. The result was a significant reduction in installation, maintenance and operating costs.

At the launch of the fixed-tilt systems, the gross margin was 30% due to the technological competence of the products. Then the pressure on prices changed everything. Technological differentiation for fixed structures is now minimal. The gross margin is in the single digits. Barriers to entry are low and, as a result, the number of suppliers has increased dramatically. The fixed system has become a product like any other.

The single-axis follower follows the same path. There are still many innovations. There are still wind tunnel tests to determine the position of the panels, and to study the resistance to snow or wind. Companies are trying out bold designs. Price pressure continues to be strong. Dozens of companies now offer similar designs with similar costs (NClave, Soltec, GameChange, PV Hardware, SFR, Gestamp). Barriers to entry continue to fall. The differentiation of single-axis trackers is constantly being reduced.

Tracker vendors still benefit from the product design and the customisation of the layout according to terrain, geography, etc. On the other hand, it is questionable how assembly companies will be able to remain competitive and widen their margins. Many are in the process of integrating manufacturing in order to keep the different margins of the different stages. Companies are evolving towards service companies offering complementary services and cabling.

There are now hundreds of companies that manufacture fixed installations, and about 30 well-established companies that produce trackers. Despite the number of manufacturers, there is no consolidation in the sector. This is because there is still no barrier to entry. The targeted companies have reduced profitability and little ability to move into services or to acquire competitors. The sector is attracting fewer and fewer investors and companies are gradually losing market share. They are reducing their volumes, which increases their unit costs. Little by little, they are becoming marginalised or disappearing.

Fixed installation panel companies have a single-digit market share. Concerning the single-axis trackers, if we exclude the first two (NEXTracker and Array Technology) which occupy nearly 50% of the market, the share of the other players decreases, because new entrants are progressing rapidly by betting on cost reduction. There can always be company mergers in order to move downstream, towards assembly. There are few economies of scale in this activity.

In this context, the way forward is to reduce costs by integrating and expanding the product portfolio, and adding services to differentiate. The companies that will evolve will remain in the market because they are essential to the success of solar projects.

GreenTech Media of 10 April