PV Glut Eroding, FiT (Feed-in Tariff) Programs Help
XsunX, Inc. (OTCBB:XSNX), the developer of advanced, thin-film photovoltaic (TFPV) solar cell technologies and manufacturing processes, updates its shareholders on FiT policies and their impact on the solar industry, including a reduction in the supply glut that plagued the industry in 2009.
Feed-in tariffs, or policies created to drive the adoption of renewable energy technology, have been widely offered and used in counties including Germany and Spain. These policies have not only contributed to reducing the price of the technology significantly but also helped accelerate the move toward grid parity.
In Germany, the FiT has been so successful in spurring a fast-rate of solar adoption that the country accounted for about 50% of the total worldwide PV installations in 2009. Although a potential additional reduction in the FiT is expected to pass in Germany next month, experts still estimate equally impressive installation numbers for 2010 at around 4 GW. Compared to the total global installed capacity of PV systems expected to reach 8.6 GW (according to iSuppli), this is an incredible capacity for one country.
All these positive projections signify an important turn in the solar industry since the global recession, and thats a return to growth, said Tom Djokovich. But because of the price erosion we saw in 2009, companies will have to continue reducing their price structures which in turn will make for an intensely competitive marketplace. Fortunately, XsunX is positioning itself to capture market with an innovative and cost-competitive technology once were ready commercially later this year.
Not all countrys feel FiTs are beneficial at the current time due to uncertain market conditions. China was expected to announce a new FiT program, but reported this week that it has been delayed indefinitely. Some reports say government officials want to see what the market does first since pricing has come down so dramatically, while others say it has less to do with pricing and more with strategic competitive thinking. Even without the Chinese FiT, theyre still moving forward with a number of tendered utility-scale PV installations that will help guide the tariff price when its implemented.
The solar supply chain is a commodity-like market. As such, its important to stay nimble as a company and remain relevant with a good product whatever the incentive program is, FiT or otherwise, added Djokovich. That is our concentration here at XsunX to stay relative through innovation as opportunities to either improve or develop new technologies present themselves.
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