Rishabh Mosalpuria
Sinovoltaics’ PV Module Manufacturer Financial Stability Rankings are published quarterly, they rank the financial strength of the Photovoltaics (PV) manufacturers. It is crucial to learn about the financial stability of a PV manufacturer as it describes the effect on the validity and enforceability of their product warranties. A stakeholder could use this vital information to better protect his interests against the possible risks of a failed return on investment (ROI) for any PV project. It is calculated using the Altman-Z score, which includes a mathematical formula that depends on various factors such as the company’s income and valuation to determine the financial health of a company. It evaluates a company’s financial strength by studying public information through a financial reliability test based on assets, liabilities, capital, earnings, market value and sales. A score of 1.1 or lower suggests a higher chance of a company’s bankruptcy within the next two years as it lies in the distress zone in the rankings, while a higher score of 2.6 or more suggests a strong financial position as it lies in the safe zone.
The latest report is the 3rd edition of 2024 which has the data from June 2021 to June 2024. The top spot is held by Abhishek Corp Ltd, followed by Insolation Energy, Waaree Renewable Technologies, Solex Energy Ltd and First Solar respectively. Apart from Abhishek Corp, all the following 4 companies have witnessed a growth in their rankings. At the same time, Abhishek Corp has maintained the top position from last quarter. The top spots of the PV Module Manufacturer financial stability rankings feature four manufacturers from India. In the top 10, 8 Asian companies dominated the rankings, while the rest 2 companies belonged to the US. This domination can be attributed to the government policies and subsidies of the various national governments in Asia. This is also met by the increasing demand for solar energy in the region. Affordability, accessibility and renewability are features that attract customers.
The 2nd ranked company in the list, Insolation Energy, was listed on the Bombay Stock Exchange in 2022. While the company had launched its IPO at Rs.38, it was subscribed 183 times. On the first day, it was listed at Rs 76.10, giving investors a profit of 100.23%. This reassures the investors about the finances of the company positively. A similar story is seen with Boviet Solar from Vietnam. The company’s financial stability is backed by BloombergNEF, which ranked it as a Tier 1 PV module manufacturer. Sienna Cen, President of Boviet Solar USA, described it as a third-party validation of the company’s financial stability.
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However, things aren’t looking good for manufacturers. An article from PV magazine indicates that a price war is going on between manufacturers caused by innovation and oversupply. Polysilicon, the prime component of solar panels, has seen its price shatter by a margin of 77%, falling to a record-breaking low of $5.58 per kilogram on July 10th. The price war seems to be benefitting expanding markets like India and Brazil, which are currently looking at an increase in solar imports. India has witnessed a 113% growth in solar cell and module imports than last year, which proves a high and increasing demand for solar systems. Though the revenue in dollars declines for Chinese PV manufacturers, great demand from Europe and upcoming markets like Pakistan has kept the PV exports high. The current scenario is a complex situation for the solar manufacturing industry as the companies struggle with razor-thin margins, the price wars are expanding the idea of solar power globally, potentially leading to an increase in demand.
Jenny Chase, Solar Analyst for BloombergNEF, indicated in a recent interview that falling module prices and a sense of uncertainty may lead to a shift in market dynamics that could impact future investments. Oversupply could lead to intensified competition and further price drops, complicating profitability for manufacturers. She also added that the upcoming year will be critical for consolidation in the solar manufacturing sector, as weaker companies may not survive the downturn, leading to a more streamlined industry.
Sinovoltaics’ PV Module Manufacturer Financial Stability Ranking becomes crucial in today’s times of record low prices of PV modules and uncertainty over the future of many PV manufacturers. With the potentially booming sustainable market of solar technology, a strong financial compaPV Manufacturers Price Warsny in the field can promise significant returns and prove to be a good investment. However, the rankings themselves do not indicate the actual quality of PV equipment. But can be proven beneficial for buyers, investors and industry stakeholders, such as financial institutions, who can use the ranking reports critically to analyse and identify financially stable partners.
