The rooftop solar industry is facing a meltdown amid slower installations, a glut of cheaper Chinese solar panels and higher interest rates that are darkening consumer demand.Shares in one of the planet’s leading solar companies, Israel-based SolarEdge Technologies, have fallen more than 40% since late last week, wiping out billions in shareholder value in a matter of hours.It came after the company warned its third quarter revenue will be “well below” previous guidance due to lower installations of its groundbreaking solar technology — panels and power inverters — and competition from cheaper Chinese products.In a press release, the company said its financial woes are “unrelated to the tragic events that have unfolded in Israel” where manufacturing continues unimpeded..“As China dominates both the production and processing of polysilicon into PV modules, Chinese manufacturers have been increasingly able to undercut the competition on price.”.“During the second part of the third quarter of 2023, we experienced substantial unexpected cancellations and push-outs of existing backlog from our European distributors,” said Zvi Lando, Chief Executive Officer of SolarEdge. “We attribute these cancellations and pushouts to higher than expected inventory in the channels and slower than expected installation rates. In particular, installation rates for the third quarter were much slower at the end of the summer and in September where traditionally there is a rise in installation rates.”SolarEdge’s announcement had ripple effects throughout the entire rooftop solar industry, which will report financial results next week amid a plethora of Wall Street downgrades. According to Bloomberg, the Invesco Solar fund — which tracks the industry — is down about 40% since the start of the year..It all adds up to “a warning shot for residential solar” Rob Barnett, Bloomberg Intelligence.It all adds up to “a warning shot for residential solar,” said Rob Barnett, senior analyst for Bloomberg Intelligence. “SolarEdge and other residential-exposed names could be seeing a slowdown attributed to higher interest rates and elevated inventories in Europe appear to be leading to a demand pullback as companies try to right-size their stockpiles,” Barnett said. According to market research firm RystadEnergy, €7 billion worth of Chinese-manufactured solar panels are piling up in warehouses across the EU — enough to power up to 20 million homes and as much as all the solar power installed on the continent. Rystad is expecting that number to more than double by the end of this year.Chinese-made panels often cost as little as two thirds comparable European units, it said in a report.“As China dominates both the production and processing of polysilicon into PV modules, Chinese manufacturers have been increasingly able to undercut the competition on price,” it said.“European countries are desperate to get their hands on affordable solar infrastructure to advance their renewable energy targets, decarbonize and avoid paying elevated prices for new capacity. Although efforts are underway to build a reliable solar supply chain in Europe,” wrote Marius Mordal Bakke, Rystad’s senior supply chain analyst.
The rooftop solar industry is facing a meltdown amid slower installations, a glut of cheaper Chinese solar panels and higher interest rates that are darkening consumer demand.Shares in one of the planet’s leading solar companies, Israel-based SolarEdge Technologies, have fallen more than 40% since late last week, wiping out billions in shareholder value in a matter of hours.It came after the company warned its third quarter revenue will be “well below” previous guidance due to lower installations of its groundbreaking solar technology — panels and power inverters — and competition from cheaper Chinese products.In a press release, the company said its financial woes are “unrelated to the tragic events that have unfolded in Israel” where manufacturing continues unimpeded..“As China dominates both the production and processing of polysilicon into PV modules, Chinese manufacturers have been increasingly able to undercut the competition on price.”.“During the second part of the third quarter of 2023, we experienced substantial unexpected cancellations and push-outs of existing backlog from our European distributors,” said Zvi Lando, Chief Executive Officer of SolarEdge. “We attribute these cancellations and pushouts to higher than expected inventory in the channels and slower than expected installation rates. In particular, installation rates for the third quarter were much slower at the end of the summer and in September where traditionally there is a rise in installation rates.”SolarEdge’s announcement had ripple effects throughout the entire rooftop solar industry, which will report financial results next week amid a plethora of Wall Street downgrades. According to Bloomberg, the Invesco Solar fund — which tracks the industry — is down about 40% since the start of the year..It all adds up to “a warning shot for residential solar” Rob Barnett, Bloomberg Intelligence.It all adds up to “a warning shot for residential solar,” said Rob Barnett, senior analyst for Bloomberg Intelligence. “SolarEdge and other residential-exposed names could be seeing a slowdown attributed to higher interest rates and elevated inventories in Europe appear to be leading to a demand pullback as companies try to right-size their stockpiles,” Barnett said. According to market research firm RystadEnergy, €7 billion worth of Chinese-manufactured solar panels are piling up in warehouses across the EU — enough to power up to 20 million homes and as much as all the solar power installed on the continent. Rystad is expecting that number to more than double by the end of this year.Chinese-made panels often cost as little as two thirds comparable European units, it said in a report.“As China dominates both the production and processing of polysilicon into PV modules, Chinese manufacturers have been increasingly able to undercut the competition on price,” it said.“European countries are desperate to get their hands on affordable solar infrastructure to advance their renewable energy targets, decarbonize and avoid paying elevated prices for new capacity. Although efforts are underway to build a reliable solar supply chain in Europe,” wrote Marius Mordal Bakke, Rystad’s senior supply chain analyst.
