Solar Profit Margins Compared to Other Industries

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As many are aware, the solar industry is going through a bit of a shakeout. are stressing or killing a number of solar companies. However, overall, if you look at the average profit margin of the solar industry compared to other traditional industries, you can see that the solar industry still has a profit margin it can be happy about.

Canadian Solar, one of several large solar companies, recently announced that its profit margin is likely to shrink to 12% due to growing competition and the of some solar panel components. Now, compare that tothis:

Hmm, notice that the solar industry, while squeezing its margins, would still land near the top of this list?

The bottom line message: there may be a “shakeout” in the solar industry in the months and years to come, many companies may not make it, but that doesn’t mean the industry is collapsing — that is a sign that the industry is maturing. The solar industry is the fastest-growing industry in the U.S., growing approximately 10 times faster than the U.S. economy as a whole! Margins are coming down, but sales volume is going up.

“Yes, narrowing margins are making life difficult for smaller, higher cost producers,” Garvin Jabusch of Alt Energy Stocks . “But this is and has always been a standard part of the evolution of any industry from niche to growth to mainstream.”

Demand for solar is increasing. Costs are dropping. And competition is rising (as well as collaboration). Good luck to all those trying to make a living in this industry with what they hope will be the next best product, but, clearly, there can’t be 1000 bests.

Let me know if I’m missing something here — this is an area of the industry I don’t normally delve into.

via shutterstock

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