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Summary:

While the solar industry has been shining bright over the past few years, the industry’s forecast isn’t all sunshine, according to a report issued Thursday morning from Lux Research. Even though solar revenues are expected to more than triple to $70.9 billion in 2012 from $21.2 […]

While the solar industry has been shining bright over the past few years, the industry’s forecast isn’t all sunshine, according to a report issued Thursday morning from Lux Research. Even though solar revenues are expected to more than triple to $70.9 billion in 2012 from $21.2 billion in 2007, solar supply will exceed demand as soon as 2009, according to the report. And that means large solar players, namely firms that produce traditional crystalline photovoltaics and haven’t invested in new technologies like solar thin film, will have some storms to weather.

Well, the tipping point had to come. There’s been a shortage of available solar-grade polysilicon, the key ingredient to traditional solar panels, but that polysilicon constraint will start to relax next year and end in 2010, says Lux, which looked at 133 polysilicon construction projects currently in the works. And with enough polysilicon to meet — and exceed — demand, combined with the recent aggressive pace of installations in countries like Japan, Germany and Spain, demand for solar installations will reach 8.96 GW in 2009, while solar supply will reach 9.57 GW.

The pendulum swing is also due, in part, to new technologies that don’t rely on polysilicon, such as thin-film solar, which uses a variety of non-silicon materials printed on flexible bases, and solar thermal, which uses the sun’s heat to produce electricity.

The solar horizon will look cloudy for a few years to come, says Lux. There will be oversupply through 2012, when they project a demand of 20.3 GW worth of installations vs. a supply of 21.2 GW.

Those in the tech industry know what it feels like when a bubble bursts. Michael LoCascio, senior analyst at Lux Research, puts it simply when he says:

While sales volumes, measured in megawatts, will continue to increase, average sales prices will fall. The result is that revenues for crystalline silicon PV will drop on a year-over-year basis in 2010 for the first time in memory – which will cool the enthusiasm for venture capital funding and IPO events.

Yeah, that’s the sound of the solar bubble popping.

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  1. When will India’s Power Gap go away. There is so much deficit in it.

    http://tekno-world.blogspot.com

  2. Oversupply will plague solar industry through 2010, report says Thursday, March 20, 2008

    [...] release: Solar Bubble to Burst in 2009 as Supply Exceeds Demand Earth2Tech: Solar Bubble to Burst Next Year, Report Says grennbizjournal: Clean-energy markets grew 40% in 2007, Clean Edge [...]

  3. China has invested heavily in the production of solar-grade polysilicon, based upon the recent runup of prices by a factor of between 5 and 10. The new polysilicon plants are polluting China’s air, soil, and water in a remarkable way, apparently with government blessing.

    When the bubble bursts it will be the peasants whose water, air, and land have been toxified by industrial waste who will be left paying for the sins of their government and corrupt industrialists.

  4. Green energy is definitely the best solution in most cases. Technology like solar energy, wind power, fuel cells, zaps electric vehicles, EV hybrids, etc have come so far recently. Green energy even costs way less than oil and gas in many cases.

  5. Actually most “green” power is a lot more expensive than fossil fuels or nuclear energy. And like Al Fin said, the production of some of these technologies like solar panels can be very polluting.

  6. Someone send me a penny postcard when someone qualified to comment on manufacturing, engineering or science shows up. Marketing and merchandising was my old gig – New World and Asia.

    My confidence level in “analysts” or “green-geek-economists” is below ground level.

  7. I like this Blog very much.

    Congratulations!

  8. ” the production of some of these technologies like solar panels can be very polluting.” Could be, but measure it in long term results.

  9. |.::La Bolla Solare che ci attenderà nel 2009. Le previsioni della Lux Research prospettano per il prossimo anno lo scoppio della prima Bolla Solare: “The End of the Beginning”. Scopriamo come e perché::.|Bolla solare 2009,bolla solare,Bolla energia Monday, March 24, 2008

    [...] (vedi Motori Stirling), questa bolla può veramente scoppiare. Lo spiega direttamente Ted Sullivan Lux Senior Research Analyst: "Le sovvenzioni dei governi come Giappone, Germania o Spagna, stanno contribuendo a rendere [...]

  10. |.::La Bolla Solare che ci attenderà nel 2009. Le previsioni della Lux Research prospettano per il prossimo anno lo scoppio della prima Bolla Solare: “The End of the Beginning”. Scopriamo come e perché::.|Bolla solare 2009,bolla solare,Bolla energia Monday, March 24, 2008

    [...] (vedi Motori Stirling), questa bolla può veramente scoppiare. Lo spiega direttamente Ted Sullivan Lux Senior Research Analyst: "Le sovvenzioni dei governi come Giappone, Germania o Spagna, stanno contribuendo a rendere [...]

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