Just as I was recently thinking of letting some solar stocks shine on my meager technology portfolio, a doom-and-gloom scenario was recently predicted by the research firm, Lux Research.
Lux said the superheated global solar industry will soon experience some cooling down as supply for solar modules is expected to outpace demand in 2009, which will cause prices to fall down and cool the enthusiasm for venture capital funding and IPOs.
“Revenues for crystalline silicon photovoltaics will drop on a year-over-year basis in 2010 for the first time in memory. It will be hit with a one-two punch of slackening demand growth and increased competition from new technologies like inorganic thin-film PV and solar thermal.”
Government subsidies are the major drivers for solar demand but adoption coming from countries like Germany, Japan and Spain is ramping down.
Sounds like ethanol but at least this time we don’t have the food versus fuel issue…
Still, it might not be a total meltdown for the industry as lowered costs for photovoltaics could result in increase in consumption, especially if new markets such as China and India could adopt healthier subsidies.