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Renewable Energy Corp’s business is holding up for now, but it “would be naive” to think that the fast-growing solar industry will not be affected by the global financial crisis, its chief operating officer said on Wednesday.
“We have not to date received any cancellations or postponements of shipments or orders, but it would be naive to think the (photovoltaic) industry would not be affected,” REC COO John Andersen said in an interview.
Solar panel companies need access to credit both to expand production facilities and to fund the growing number of photovoltaic power systems, Andersen said, adding that they were “still struggling to sort out” what the impact of the crisis would be on the burgeoning industry.
In recent days, solar investors have fretted not only that tighter credit would decrease demand for solar panels, but also that some Chinese makers of the industry’s key raw material, polysilicon, could have difficulty funding their aggressive capacity expansions.
REC is one of the world’s top polysilicon manufacturers, and Andersen said most of the industry’s planned capacity for 2009 was likely near completion and would not require additional funding.
“I would expect that most of the capacity, if not all the capacity, planned for 2009 would have to be in a very late stage of construction at this point in time,” Andersen said. “At that stage you would not have a lot of uncovered capital requirements.”
Beyond 2009, however, Andersen said some polysilicon projects could be in trouble.
“You could envision certain projects being potentially delayed or maybe slowed down,” he said.
Solar companies are banking on increased supplies of polysilicon next year to help drive down prices on the material.
Sky-high silicon prices due to soaring demand have been a major impediment to growth of the solar industry in the last year.
As silicon prices drop, prices on solar panels are also expected to fall.
REC expects the average price of solar modules to fall between 5 percent and 10 percent next year, Andersen said, though price declines could be “more significant” depending on how the financial turmoil affects demand for solar.
The recent financial turmoil comes as REC is launching its first solar panels in the < ?xml:namespace prefix = st1 />
“That’s going to affect how we allocate the product,” Andersen said.
For its entry into the