Goldman Sachs Calls a Bottom in Solar
(Bloomberg) -- Goldman Sachs Group Inc. sees an end to the gloom for solar manufacturers as demand in China stabilizes and free-falling panel prices bottom out.
China, the world's biggest solar market, sent convulsions around the globe last year when it dialed back incentives and slowed development. That exacerbated a global panel glut and has sent prices tumbling 26 percent -- forcing some manufacturers to sell below their costs.
Now Goldman sees installations in China stabilizing in 2019 at around 42 gigawatts, analyst Brian Lee wrote in a research note. Globally, the investment bank forecasts 15 percent growth.
“The global supply-demand backdrop looks to be improving,” Lee wrote. So far this year, panel prices have declined just 2.3 percent, according to PVinsights data.
In the U.S., Goldman sees about 50 percent growth in the utility-scale sector this year over 2018, largely due to state renewable energy mandates and solar's increasing competitiveness against fossil fuel generators. Solar farm installations may reach a record 12 gigawatts next year in the U.S. alone, Lee wrote.
That's good news for manufacturers including First Solar Inc., which is rolling out a new and more powerful panel design. The company's shares have gained 45 percent this year.
Canadian Solar Inc. is also expected to benefit from stable prices and accelerated growth in the second half, Lee said in the report.
To contact the reporter on this story: Christopher Martin in New York at cmartin11@bloomberg.net
To contact the editors responsible for this story: Lynn Doan at ldoan6@bloomberg.net, Joe Ryan, James Attwood
©2019 Bloomberg L.P.
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