Solar Shakeout Under Way, Serious Oversupply to Come, Report Says

There has been no shortage of projections that this will be a dark year for the solar market. Lux Research forecast nearly a year ago that solar supply would exceed demand in 2009. Last fall, the firm reiterated its prediction and said it expected margins to become increasingly difficult, with the weakest players either failing or being acquired. And in December, the Information Network said it anticipated global growth in the solar market to slow to 26 percent in 2009, down from 48 percent last year. We’ve been approaching the tipping point for awhile now, and according to the latest research from Lux, the solar market is finally tumbling over — with a push from the global economy.

solar-nellis

“While oversupply in the solar market has been looming for some time, the correction has been more aggressive due to the economic crisis,” Lux senior analyst Ted Sullivan said in a release this morning. At this point, Sullivan and his team expect cell and module capacity to reach 10.4 GW, outpacing demand nearly twofold. The overall market will shrink to $29 billion and 5.3 GW, down from $36 billion and 5.5 GW in 2008, according to the Lux report.

But it’s not all doom and gloom for the solar industry. Despite expecting “widespread company failure,” Lux anticipates gains for thin-film and CIGS this year and significant strides toward grid parity — making the survivors more competitive than ever on the larger energy market.

Photo credit SunPower installation at Nellis Air Force Base

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