First Solar, SunEdison and SunPower dominate the operations and upholding part for megawatt-scale solar PV. Together, the three represent 44% of the $300 million market, claims IHS Technology, which scrutinized the non-residential solar PV system integrators and megawatt-scale operations and maintenance (O&M) providers in North America.
First Solar leads North American market
The O&M market for megawatt-scale solar PV in North America was evaluated to be worth $300 million in 2015. It is expected to grow to $1 billion in 2020. The difference between solar PV integrators and O&M suppliers is related to time. Integrators concentrate on short-term arrangements following a project’s completion, while O&M service providers are interested in long-term servicing.
Presently, many systems stay under their underlying contract of one to five years, but that will change once the market matures, with O&M services replacing their initial integrator services. Currently, First Solar, with 26% of the market in 2015, leads the North American megawatt-scale O&M market, followed by SunEdison (11%) and SunPower (7%).
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Camron Barati, IHS’ North American Solar analyst, notes that “solving system downtime and maintenance issues increases in importance” once systems are integrated into long-term ownership. “Less system downtime over the life of a project requires more attention to preventative and condition-based maintenance, which incurs higher costs and requires higher O&M budgets,” the analyst states.
Equation could change
Though almost half of the market is controlled by three companies, these standings could change in the coming months. PV Magazine notes that new North American Electric Reliability Corporation norms are being set up as solar systems expand. These new regulations focusing on systems 75 MW or bigger could affect about 7 GW of solar capacity presently under development.
Though the vertically-integrated nature of the top companies gives them an advantage, it is unclear how SunEdison’s liquidation changes the equation. In just a year, the company doubled its debt to $11.7 billion before the end of September 2015 by acquiring projects and companies on six continents.
Nevertheless, the Solar Energy Industries Association and GTM Research expect the industry’s strong growth to continue through 2020, thanks to the extension of the Investment Tax Credit for solar power systems. However, a portion of the 15 GW of new PV previously predicted for this year could be delayed until 2017.
At 11:03 a.m. Eastern, First Solar shares were up 0.39% at $48.64. Year to date, the stock is down more than 27%, while in the last year, it is up almost 6%. the stock has a 52-week high of $74.29 and a 52-week low of $40.25.