According to the sustainable growth index of the photovoltaic industry released by PRTM Management Consulting in 2011, no PV company in the past has been able to maintain its leading position for some time. To make matters worse, as the publicly listed 25 largest PV companies ranked, it is difficult for companies that have fallen from the top to regain market share. In view of this ups and downs, the PV industry executives must ask themselves: “Why is the company in this industry so fragile, what can we do to stay ahead?†Many companies simply cannot adjust their capabilities in time to keep growing. The solar market is in sync. It takes time to develop and implement a business strategy. The strategy that is feasible this year should be abandoned by next year. In fact, many PV companies have been in a state of desperation. This fluctuation is caused by three unstable factors in the solar market. First, the annual growth is violent. Since 2000, the industry's growth rate has reached 130%, but it has once shrunk to 20%. This extremely unstable growth rate makes the strategic planning of PV companies extremely challenging. Faced with such uncertain market demand, it is difficult for managers to make correct decisions on the allocation of funds and the expansion of production capacity. Second, the market can experience both expansion and contraction in a single quarter. Because the industry is still relatively immature, huge growth demands may disappear without warning. Third, the imbalance between supply and demand continues to impact the corporate value chain. The raw materials and production capacity of the photovoltaic industry are always in a cycle of shortage and surplus. The successful supply strategy of the previous year has turned into the cost burden of the next year. From 2005 to 2008, most of the main raw material for solar panels, polysilicon, has been in short supply. As demand rose, many companies signed long-term polysilicon contracts, which locked prices at a lower level and earned the market. But in 2009, the market demand for polysilicon fell, and those companies that bought polysilicon in the spot market immediately fell into trouble. All three of these drivers have one thing in common, that is, they are largely generated by government incentives. The government encourages solar investment and reduces the difference in production costs between renewable and new energy. Such incentives include paying fixed, higher-priced solar feed-in tariffs (FIT) for energy producers, investment tax credits to reduce costs for building solar power plants, and requiring countries to regulate the share of renewable energy. Renewable investment standard objectives. These measures have successfully reduced the production costs of photovoltaic power plants. But they have integrated this industry chain into the financial market, which is not driven by energy demand, but by the investment that PV power plants can get. As technology improves, government incentives will eventually decline, but the volatility of this industry will not be reduced. In this case, if PV companies want to succeed, they cannot simply target pure production capacity. They must develop a flexible business model and continually adjust their business strategies to be able to quickly determine the scale of production in specific markets and in different parts of the PV value chain. This ability requires them to strike the right balance between organic growth and non-organic growth in the form of joint ventures, partnerships, mergers and acquisitions. This capability provides tremendous advantages in speed, market intelligence, and capital investment reduction. In addition, PV companies must also be aware that certain links and markets do not provide first-mover advantage. In fact, with the rapid expansion and shrinkage of demand, the first mover faces a huge risk of over-investment. Therefore, companies should hedge their bets and reduce the impulse to invest large amounts of money, time and management focus in hot markets. Equally important, companies must be good at managing cash so that they can stay flexible in a growing market and have a buffer in times of economic downturn. Before the market achieves grid parity and rising solar demand, solar feed-in tariffs and Other government incentives and capacity constraints will continue to trigger the turmoil in the industry. For these reasons, extreme volatility is not a short-term phenomenon, but a long-term feature of the PV market. Photovoltaic companies eager to succeed have no choice but to adapt.
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