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The solar-equipment industry has begun its biggest consolidation in at least two years as photovoltaic systems plunge in price, forcing weaker companies to team up with competitors or close. Mergers and acquisitions announced so far total $3.3 billion, up 33 percent from the $2.47 billion in all of last year.

A sell-off in solar stocks has made acquisitions cheaper. The pace of acquisitions is the fastest since 2009, when $6 billion were recorded. The biggest deals that year involved GCL-Poly Energy Holdings Ltd., the Chinese maker of polysilicon. That's the raw material used in solar cells, which are combined into modules, or panels, that convert sunlight into power. "The industry is ripe for consolidation," said Michael Schostak, director of business development and communications at Energy Conversion Devices, a maker of thin-film solar laminates.

Adam Krop, an analyst at Ardour Capital Partners, has put Energy Conversion on a list of vulnerable companies. Milpitas' Daystar Technologies also is a target, said another analyst, Aaron Chew at Maxim Group LLC. Energy Conversion and Daystar both lost more than 80 percent of their market value this year through Monday. Energy Conversion also is sitting on a glut of inventory. It had 112 days of supply in the second quarter, the most of any company in Bloomberg Global Leaders Solar index. At Evergreen, the plan is to sell the business at auction. Another company, cell maker SpectraWatt, filed for protection from creditors this month.

Solyndra, a manufacturer of solar panels and mounts for industrial and commercial rooftops, also has suffered setbacks. The Fremont company canceled an initial public offering last year and warned in July that the loss of a federal loan guarantee would dim its prospects. Daystar, which makes thin-film solar cells, is in discussions with potential investors to "provide financing, manufacturing capabilities or other opportunities," Chief Financial Officer Chris Lail said in an interview.

The U.S. solar manufacturing consists of "legacy laggards" and innovators that have "stuff so new that it's not even on the shelves," Chew said. "The question is, will the shakeout result in consolidation or closures?" The survivors likely will be companies with proprietary designs that improve efficiency, while those that focus on low-cost manufacturing strategies may be less appealing to potential buyers and investors, Krop said.

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