2018-06-06 11:09:24

Chinese Burn Will Only Make the Solar Industry Stronger

Chinese Burn Will Only Make the Solar Industry Stronger

Remember how there was a glut of computer chips in 2008, and then the world stopped using computer chips? Yeah, me neither.

That’s a good reason to discount your worries about the effects on solar power from recent policy blows on panel manufacturers by the U.S. and Chinese governments.

The falls in the share prices of some major producers have certainly been dramatic – 43 percent so far this year for JinkoSolar Holding Co., 20 percent for Canadian Solar Inc., and 4.4 percent for Hanwha Q Cells Co. But to date, what hasn’t killed the solar industry has only made it stronger.

Weakness Is Strength

Falling solar module prices have been great for the solar industry

To see why, reflect upon some history. Solar module prices slumped 80 percent between 2010 and 2017 as rising efficiencies and burgeoning supply pushed down expenses. That process put many manufacturers out of business – but the plummeting costs caused global installed capacity to increase almost nine-fold, and the victors of that market battle have since done well on the spoils.

Those who bought shares in JinkoSolar and Canadian Solar at the end of 2011 when the market was in crisis had received total returns of 33 percent a year and 22 percent a year respectively by the end of last week. That compares to 22 percent and 17 percent for investors in Taiwan Semiconductor Manufacturing Co. and Intel Corp. over the same period.