The U.S. arm of Germany's Solon is betting that demand for solar power from utilities and a new easier to install panel will help drive growth as it shuts down its module making operation in Arizona, the head of that unit said on Wednesday.
Solon announced last month it would halt module production at its Tucson, Arizona plant, laying off 60 of its 130 workers there, to concentrate on building solar power plants for customers.
The shutdown of that module production comes as the solar industry faces a glut of modules that have pushed down prices for the solar equipment that turn sunlight into electricity by more than 30 percent so far this year.
That steep price drop and weakening demand in key European markets has prompted its parent, Solon SE (SOOG.DE) to cut its financial forecast twice this year and pushed its shares down more than 40 percent since the start of the year.
In July, Solon cut its sales forecast by 20 percent and said it expected to post a significant loss for the year.
While the panels' price declines have squeezed profit margins across the industry and pushed some companies, such as Evergreen Solar (ESLRQ.PK), SpectraWatt and Solyndra into bankruptcy, Daniel Alcombright, CEO of the U.S-based Solon Corp said those price drops would help broaden the market.
"I see the lowering of prices from Solon's perspective as a good thing," he told Reuters on the sidelines of the RETECH energy conference.
Alcombright expects power utilities to be the key driver for the industry, extending the trend that has pushed the industry toward larger installations from its traditional base of residential homeowners.
"The makeup of investors will shift a little bit," he said. "Certainly what you're seeing is utilities getting more into the game."
Solon has built 80 megawatts of solar power in the United States since it entered the country in 2007, according to Alcombright.
The company is currently developing a project in Arizona that stores electricity using a compressed air system and a lithium ion battery so that power collected during the daytime can be released at other times.
Next month, Solon will launch a new module at an industry conference in Dallas that will incorporate a frame that mounts directly onto flat roofs, a design the company hopes will attract developers and installers who build the systems on commercial properties. Installers typically have to build a mounting frame on the roof, then attach the modules to that.
The module design should reduce the installers' costs of mounting the panels, which typically make up more than half the costs of a solar array.
Alcombright said the company had not settled on a supplier for the module parts, or on where it would establish a production line that would fit the modules with the new frame.