Worldwide installations of solar photovoltaic systems will decline to 3.5 gigawatts in 2009, down 32 percent from 5.2 GW in 2008, according to iSuppli .In addition, average selling prices per solar watt will decline by 12 percent, leading to a 40.2 percent plunge to $18.2 billion in global revenues for PV installations in 2009, down from $30.5 billion in 2008.

"For years, the PV industry enjoyed vigorous double-digit annual growth in the 40 percent range, spurring a wild-west mentality among market participants," said Henning Wicht, a principal analyst for iSuppli.

The growth attracted "an ever-rising flood of market participants," some of whom may not survive this year's steep downturn, he added. "The number of new suppliers entering and competing in the PV supply chain will decelerate and the rate of new capacity additions will slow, bringing a better balance between supply and demand in the future," Wicht said.

Earlier this month, an investment banking firm cut its outlook for several leading solar vendors amid falling prices and other issues in the sector.

New and upgraded incentives for solar installations from nations including the United States and Japan will not compensate for the Spanish pullback, Wicht said. Excess inventory and falling prices for solar cells and systems also will not stimulate the market enough to overcome the downturn, he added.

The current financial crisis is also to blame for the solar downturn.

"Power production investors and commercial entities are at least partially dependent upon debt financing," Wicht noted. "Starting in the first quarter of 2009, many large and medium solar-installation projects went on hold as they awaited a thaw in bank credit flows." The downturn may be short lived. The market watcher predicts a 57.8 percent increase in revenue in 2011 and similar growth rates in 2012 and 2013.

By: Docmemory
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