Consolidation has been a major trend within the solar industry for the past year, representative of a rapidly growing evolving industry.
Policy changes like the 2022 Inflation Reduction Act (IRA) and AD/CVD tariffs, market conditions, and supply chain dynamics have created both opportunities and challenges — the combined impact of which has led to 100 solar bankruptcies and triggered a wave of consolidations.
Only companies that position themselves strategically — with strong, diverse partnerships, vertical control of the supply chain, and an agile mindset — will have the tools needed to survive this year's solar coaster.
Photo courtesy of Finimize
Consolidations Amid Mergers and Financial Struggles
From solar installers going bankrupt to PV module manufacturers being bought out following a ‘bankable’ 2023, the news keeps coming.
Multiple major solar manufacturing companies are also announcing plans to downsize — in some cases by nearly 20% — or halting manufacturing expansion to maintain the status quo.
In other cases, dominant solar industry players are merging, an unprecedented move even for an industry familiar with ups and downs.
Why is Solar Seeing Consolidation?
With the success of solar and infusions of support from the US government — why are we seeing so much consolidation?
The Political Climate, Tariffs & Other Implications: Political factors influencing the industry's recent wave of consolidation include import tariffs like the AD/CVD, the introduction of safe harbor provisions into the IRA, the uncertainty of new draft industry standards, and even the upcoming U.S. presidential election.
Oversupply & Fluctuating Market Prices: Global solar component oversupply and over-expansion have led to falling prices and a reduced profitability. Major solar manufacturers reported losses in the first half of 2024 due to market oversupply and lack of US demand linked to domestic content requirements. In response, many companies are restructuring, cutting costs, and pausing facility expansions. The industry is largely focused on strategizing to adapt to market supply and demand fluctuations.
High-Cost Financing: High financing costs frequently drive downsizing, consolidation, and M&A activity, while even secure investments can face unexpected cost increases from permitting delays, supply chain disruptions, rising expenses, and policy changes, prolonging timelines and impacting budgets and profitability.
What Does This Mean For The Solar Industry?
Consolidation and major shifts in policy and restructuring mean that companies will need to strategically prepare and have the ability to allocate skills and resources appropriately in order to adapt.
Technological advancements that make solar energy components/products more cost-effective and efficient will continue to succeed, along with diversification of services and business models. Pivots toward more effective energy storage, PV recycling, agro-voltaics, and community solar are all likely to take root.
It is also likely that large energy companies will be able to capture some market share, adapting as a result of leveraging existing resources.
Companies who prioritize long term planning and agility — encouraging collaboration over brute competition — with control of their own supply chain and strong connections to other industry leaders are most likely to succeed.
Photo courtesy of PV Magazine
Imperial Star Solar Remains Agile
Imperial Star Solar has maintained strength and agility through a volatile 2024. With global facilities in Laos and Indonesia supporting onshore Texas expansion, this vertically integrated supply chain provides exemplary reliability and the ability to effectively mitigate and minimize risk.
This year alone, Imperial Star has successfully:
Navigated tariff updates in order to help our clients reduce risks associated with AD/CVD and strategically diversify our supply chain
Partnered with domestic suppliers to bring product manufacturing closer to qualifying for the domestic content adder
Opened a new 2GW Texas facility within a year of securing the facility location
Imperial Star Solar will continue to remain agile, to strategically adapt based on industry changes, and to provide what we have always promised our customers: Reliable, American-made PV modules.
Contact Imperial Star Solar to learn more about our strategic, sustainable expansion and our thoughts on industry consolidation.
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