According to a recent Reuters analysis pointed out that the global solar energy industry could face a situation of supply exceeding demand, in turn leading to the price of solar cell modules tumbled 50% following the 2008 financial crisis became another industry after the Great Depression.

Germany is currently the world’s largest solar market. Last year, the German solar industry was investing heavily to make up for the loss of the financial crisis. As businesses have reduced time for the government to subsidize the industry prior to purchase, so in 2010 the industry showed signs of recovery. At the same time, manufacturers are most significantly increase productivity, and thus meet market demand, but for most manufacturers, can be fatal, because of their dependence on the German market are usually higher.

And Germany, Italy, Spain and the Czech Republic and other European countries are planning or already cut solar subsidies, should the banking sector, the shortfall, Reuters said the move could exacerbate the plight of solar energy industry.

Investment bank RBC Capital Markets analyst Situ Ta Bush (Stuart Bush) said: “Next year will be in serious oversupply situation. Most of the profits of suppliers will be affected by a fall in price.”

Weaken the impact of economic incentives, supporting the solar industry operating cost of funds no longer exist, manufacturers have turned to France, the United States, China and India, these emerging markets. According to EPIA, Europe’s largest solar energy association data show, the above four countries of the photovoltaic solar market in 2011 will account for 30% of the global market, far higher than 17% this year.

Analysts, however, whether these increases offset the impact of market downturn in Germany differ greatly. According to EPIA’s data, the German market will shrink 57 percent next year, from 70 billion watts of this year, down 30 billion watts.

Crisis, the European Solar Energy Research Centre analyst that the decline of the German market may not as serious as people predicted, the growth rate of other European countries may be able to compensate for this loss. The world’s leading thin film photovoltaic module manufacturer First Solar U.S. and German solar giant SolarWorld also on demand by 2011 are optimistic.

EPIA said that the current global completed 23-megawatt photovoltaic solar energy station in 2011 will add 15.4 megawatts. However, if the government cut subsidies, additional requirements may be reduced to 9 MW.

Emerging markets analyst Situ Ta Bush’s contribution to the supply and demand is still reported to have doubts. He said: “I do not think that emerging markets can make up for declining demand.” But Situ Ta predicted that next year the global demand for photovoltaic solar energy will decline by 3.7% compared with 2010, reduced from the current 11.2 megawatts to 10.8 megawatts.

PhotON according to industry publication reported the world’s top ten solar cell manufacturers have nine plans to expand production capacity by the end of this year, when the total capacity of these enterprises will reach 9.5 MW.

EnergyTrend research analyst, said: “With the increased capacity, we expect solar energy to provide insufficient for Qingkuangqiangzai year Xia Bannian improve. Therefore, solar energy prices will remain stable or even slightly down.”

Currently the price of solar energy in Europe 1.92 euro, has dropped 27% last year. Analysts predict prices will continue to decline next year, could drop as much as 40%.

Reuters said that Chinese companies may profit from the decline in this round because they are usually below the market price can be sold for 20% of the hands of the solar modules. While the recent appreciation of the renminbi, these companies are also facing growing price pressure.

Jefferies analyst Michael McNamara (Michael McNamara) pointed out that there are three pairs of solar energy market prices and supply and demand forecast. The first is that demand remains strong and prices fell 15%. McNamara support the second view, that is, that the oversupply will lead to moderate price pressures, together with the German government to tighten the impact of subsidies, the battery module prices will decline 25%. He said: “I think this assumption is the most realistic situation.”

But McNamara also noted that in the worst case, the next price drop may be as high as 40%, with close to 2009.

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