Solar producers feeling the heat

The solar industry may have an assured future as part of the world's energy mix, but suppliers must weather the effects of the economic downturn if they are to share in it, writes Ian Lewis

GLOBAL solar generating capacity is continuing to grow at a rapid rate, despite the economic downturn. But this is doing little to ameliorate tough times for companies across the industry's supply chain, whose business plans were based on assumptions of even faster growth and who, as a result, find themselves selling to an over-supplied market.

The 20 largest solar-panel manufacturers alone are forecast to produce around 7 gigawatts (GW) of capacity in 2009, according to US research and brokerage company Gabelli & Co. But total global demand for solar products for the year is estimated by research firm New Energy Finance (NEF) at only around 5-7 GW – a spectacular increase in cumulative installed capacity, which stood at around 14 GW at end-2008, but nowhere near enough to soak up supply.