We spoke last month about solar bankability. Unfortunately, now we are seeing some of the fall-out that we anticipated.
SMA announced earlier this week that they see a tough year of sales ahead. They are expecting continuing price pressure in the PV market, as well as a continued European shortfall of sales. As we had mentioned, their margins and profitability could not support the crunch, and 1600 employees will unfortunately feel it personally by the middle of 2015. Most of us have felt the pain of a market squeeze, and it is not fun.
But, back to solar bankability. While we do carry and sell SMA products, and they are great, we continue to tie our reigns to ABB. Besides their top-notch products, their balance sheet can absorb these price pressures and slow-downs. I feel good selling ABB to installers knowing that the company will be around to support the product for the duration of the warranty they provide.
I have been part of companies when the slow-down occurs. First, the expense budgets are squeezed. Then, people start to lose jobs. This hurts morale and productivity. Quality then starts to slip, and the resources are stretched too thin. When bonuses are cut, the work staff is now asked to do more work for less pay. Then, when the market turns around, your R&D dollars have not been spent, and your technology lags. Then, you are in real trouble. My stomach hurts just remembering this.
We wish the best to those who will be affected in the SMA restructure, and hope they latch on somewhere quickly.