Saturday, July 18, 2009

Solar goes the way of Ethanol, down

Time for the solar industry to hire more lobbyists and whine about a bailout.

The downturn in demand highlights another serious issue that was clearly emerging last year: The industry presently has far too much supply. During the solar boom of the last few years, demand consistently outstripped supply, and essentially every solar panel produced was sold. Solar companies could increase sales as quickly as they could expand production, all the while at very profitable levels. Not surprisingly, new entrants flooded in, and existing companies expanded rapidly, with the whole industry planning as if high double-digit growth were set to continue indefinitely.