What Do They Know That We Don't?

Last week, another ambitious Chinese vertically integrated manufacturer, which entered the supply chain last November, published its modest target of 2.5 GW production capacity within 3 years. At full capacity, this company alone would be sufficient to supply the entire US PV market.
And this company is not the only new entrant. You only need to visit a Chinese PV exhibition to get the distinct impression that more solar modules are being sold worldwide than cell phones. With a difference though. In the cell phone business, there are only a few brands. Alongside all these new entrants on the market, the existing top-tier manufacturers are focusing on capacity expansion and forecasting planning ramp-up as well - determined to expand their share of the global market.

European Markets Under Discussion
We all know that the global PV market boomed a tremendous 90% in 2010 compared to 2009. All reports predict a bright future for solar energy. So, from that perspective, it seems logical for new entrepreneurs and major business corporations to step into the lucrative solar industry right now.
Nevertheless, I can’t help but wonder what these new entrants know about the current market dynamics and forecasts in Europe, which in 2010 took 80% of the global market. Indeed, despite the great opportunities, there are nevertheless a few uncertainties which must not be overlooked. Last year’s number 5 market, the Czech Republic, might disappear from the top 10. Indeed, Spain already did so - and there are no signals this market will pick up again in the near future. France is facing a market cap of 500 MW. The UK and Belgium are discussing a ban on large-scale projects. Germany will most probably reduce its FiT by another 15% in July. And this week the Italian cabinet concluded that the FiT Program worked out so well that the original target of 8 gigawatts’ installed capacity might be reached this year. So they need to take stock and think carefully about the next Energy Law, the 4th Conto Energia. Most likely, they will decide to reduce the FiT a little faster and earlier. Luckily, they did not decide to introduce market cap.

Born Pessimist?
Now, I might be a born pessimist, but these developments don't seem indicative of another major boom in Europe this year and the next. So, where will all the modules go? Perhaps I am just missing the bigger picture and developments elsewhere. Maybe the US market is ready to boom and secure global market growth. Or perhaps new Chinese market stimulation programs are still off my radar screen but ready to kick in. Or maybe I am underestimating new markets and new FiT programs such as that in the Philippines, for example.
Or perhaps history will repeat itself, like when the Spanish market collapsed in 2009 and Germany covered all the loss in Spanish demand. Will further new markets perhaps cover up any hiccups which may occur in Europe? Will modules find their way like a river finds the ocean? Would these new manufacturers put their money on this happening again?

Missing Strategic Insights?
In addition to all of this, the price of oil is rising very rapidly. Could it be that we are approaching the peak oil tipping point, with the price of oil only increasing from now on? If so, solar will become competitive even sooner, with solar modules becoming more in demand than ever before. Could it be that these new Chinese producers have strategy reports containing these insights?
The question spinning in my head is: What do these Chinese manufacturers know that we don’t? Or is it perhaps: What do we know that they don’t?