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Oversupply to hurt solar market until 2012

Posted: 18 Aug 2009 ?? ?Print Version ?Bookmark and Share

Keywords:solar panel? oversupply solar? photovoltaic?

The solar panel oversupply is so bad that nearly half of all panels made this year won't be sold within the year, according to iSuppli Corp. The firm said the problem will persist until 2012, pushing market researcher to reduce its forecast for solar panel production out to the year 2013.

The solar industry in 2009 has been undermined by collapse in demand due to the decision by Spainwhich accounted for 50 percent of worldwide installations in 2008to change its feed-in-tariff policies. This demand drop led to a massive buildup of inventory throughout the supply chain, from the raw material polysilicon, to photovoltaic cells, to complete solar systems. Despite this, solar cell and panel makers have continued to increase capacity and production of solar cells, exacerbating the inventory buildup.

Total solar panel production in 2009 will grow by 14.3 percent to 7.5GW, up from 6.5GW in 2008. However, only 3.9GW worth of installations will take place this year. That means that almost one out of every two panels produced in 2009 will not be installed but stored in inventory.

This inventory glut will have a long-term impact on the solar business, with solar panels set to remain in a state of oversupply until 2012. After that year, fast-growing demand for solar installations will be able to absorb global panel production and inventory.

iSuppli's updated forecast now shows supplier production flattening for the years from 2011 through 2013 compared to the old forecast.

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