Analyst warns of ’solar market eclipse’ in 2009

Global revenue for photovoltaic (PV) panels is expected to plunge by 19 percent in 2009, following eight consecutive years of growth, as a massive oversupply puts pressure on pricing, according to a forecast by market research firm iSuppli Corp.

Worldwide revenue from shipments of panels will decline to $12.9 billion in 2009, down from $15.9 billion in 2008, iSuppli said. A drop of this magnitude has not occurred in the last 10 years and likely has not happened in the entire history of the solar industry, according to the firm.
The plunge in revenue will come despite an 9.6 percent rise in gigawatt (GW) installations of solar panels in 2009, growing to 4.2GW for the year, up from 3.8GW in 2008, iSuppli said. However, 11.1GW worth of panels will be produced in 2009, up 62 percent from 7.7GW in 2008, the firm said, meaning that supply will exceed demand by 168 percent.

With the gap between supply and demand rising to such a level, pricing and market revenue will drop in 2009, iSuppli said.

“Supply and demand were already unbalanced in 2008 with 100 percent more modules produced than installed,” said Henning Wicht, senior director and principal analyst for photovoltaics at iSuppli (El Segundo, Calif.).

Wicht said short-term boost in demand from Spain and Germany kept installation companies busy and solar orders and module prices high. “But this boom is over,” he said, adding that by the end of 2009 average prices for panels for new installation contracts will collapse to the $2.50 to $2.75 per watt range, down from the current level of $4.20 per watt. The overall aveare price for the year will be $3.10 per watt, Wicht predicted.

EETimes