REC's latest Asia deal: what's the impact on the US PV market?

Renewable Energy Corporation, Norway's vertically integrated  PV player - biggest outside China - just announced a $187.73 million contract with an unnamed Asian cell producer.


Supposedly it's a three year deal providing high quality poly-silicon wafers to Asia. It appears that the shortage on the equipment markets, specifically for wire saws and cell lines with delivery times up to 15 months is leading to an industry-wide optimization of capacities. Those who have wafers but not the capacity to turn them into modules, a business model REC has been following for years, try to find buyers for their product. At the same time the module producers with excess capacity look for further wafer and cell suppliers.


The first impact on the US PV market is that the importers from Asia get a stabilized source on a high quality level. With module fabrication being the most labor intense part of the PV production it will give the last two big customers REC gained a certain cost advantage over American producers like SolarWorld or CaliSolar.


American PV companies are already suffering from fairly low market share and except for CaliSolar none of the producers present in the US have been announcing firm expansion plans here in the US. So although good for the worldwide PV supply chain efficiency it appears to further raise the pressure on the US PV industry in the fight for market shares.


Picture Copyright © Renewable Energy Corporation ASA