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Solar panel oversupply to last until 2012

Posted: 18 Aug 2009     Print Version  Bookmark and Share

Keywords:solar panel  oversupply solar  photovoltaic 

iSuppli Corp. forecasted that solar panels are in such oversupply that half of the panels made this year won't be sold in the year. The analyst said the problem will persist until 2012, and it has released reduced production forecasts out to the year 2013.

The solar industry in 2009 has been undermined by collapse in demand due to the decision by Spain—which accounted for 50 per cent of worldwide installations in 2008—to 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 per cent 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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