The Good Thing About The Recession (If You Want Solar Energy)

Shocking news: Less money has been available to the photovoltaics (PV) industry since the Fall 2008 crash. More shocking news: There’s gambling at Rick’s. (The latter is a Casablanca reference meant to imply that the former is hardly shocking news.)

The financial downturn’s biggest impact on the PV industry has been to make the cost of financing greater and the availability of financing less, primarily for installations rather than manufacturing. ::continue::

The overall result is a drop in solar module and solar system costs. Those are the main findings of The Effects of the Financial Crisis on Photovoltaics: An Analysis of Changes in Market Forecasts from 2008 to 2009, by John E. Bartlett, Robert M. Margolis and Charles E. Jennings of the National Renewable Energy Laboratory (NREL).

The result of the impacts on installations and manufacturing is that demand for panels has dropped faster than the supply of panels. The result of that is pretty easy to guess: The cost of PV systems is down. The good news is there has probably never been a better time for consumers to go solar.

This was an acceleration of a trend toward more affordable solar foreseen long before the crash and accentuated beyond any expectations by the crash.

Though this is bad news for the solar industry, it's good news for anybody who wants to build a solar installation.

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What happens next? Well, data collected more recently leads the NREL researchers to conclude that prices are falling even faster than they expected.

Does that mean the solar industry downturn will also last longer than expected? Not necessarily. It’s complicated. Lower prices should lead to more demand. More demand should lead to a clearing of inventories and rising prices and that should lead to more activity throughout the sector. But the oversupply is also likely to lead to reduced government incentives, as has already happened in Spain and is all but a done deal in Germany. That means reduced demand, less activity and bigger inventories.

But China and India are just getting started. China alone had more than 50 new solar companies come into the marketplace in the recession year of 2008-09 and India is about to set the biggest solar energy target in the world. Things appear about to get very interesting. click to enlarge

You can access the study here: The Effects of the Financial Crisis on Photovoltaics: An Analysis of Changes in Market Forecasts from 2008 to 2009 John E. Bartlett, Robert M. Margolis and Charles E. Jennings, September 2009 (National Renewable Energy Lab)

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