The production glut of solar cells could finally be subsiding.
Three days ago, top Chinese producer JA Solar Holdings said it faced a shortage of manufacturing capacity. Third quarter orders were well in excess of what its factories could make.
The company didn’t specify whether this unanticipated demand was confined to the booming Chinese market, where it does 77 percent of its business. But now a second source is reaching a similar – and more global- conclusion.
The worldwide solar panel market still faces over supply, said researchers at iSuppli. But high inventories have begun to ease, in part due to unexpectedly strong demand coming out of Germany. That suggests solar panel over supply may have peaked in mid 2009.
The “global supply of solar panels now is expected to exceed demand by 65.9 percent in 2009, down from iSuppli’s previous forecast announced in August of a 91.9 percent overage,” according to a press release. It is a significant shift. What’s more, it could last.
ISuppli says factory construction plans suggest the industry could oversupply the market by 75 percent in 2010 if all its plants run at full volume. But there are signs this won’t happen, due to consolidation, high inventories, strategy shifts and the like. This restraint in manufacturing plans could put the solar business on better footing.
One unknown remains and that is the German market. In July, German buying surged to record levels with a 20 percent plunged in panel prices. German buying also may have been stepped up in anticipation of a change in government support and tariffs with the arrival of the new Merkel government.
The government hasn’t yet said what changes are afoot. But less favorable policies slow demand, forecasts for next year could be off the mark and oversupply, well, welcome back.
By the way, iSuppli now expects the 2009 solar market to be 5.2 GW. It had previously anticipated 3.9 GW. That’s quite a boost for a recessionary year.
