PV solar power systems to become cheaper

The price of solar photovoltaic (PV) panels is tipped to fall in the next year as the so-called "solar module supply bubble", which has seen demand exceed supply, bursts.

The price of solar photovoltaic (PV) panels is tipped to fall in the next year as the so-called "solar module supply bubble", which has seen demand exceed supply, bursts.


The biggest problem facing the solar electric industry over the last five years has been a shortage of silicon, the most common ingredient in solar PV cells. This shortage is the reason costs of solar-electric modules has remained relatively high, with most individual rooftop solar energy panels costing over $1000 each.

But according to a report from Lux Research, a US group specialising in nanotechnology, the silicon shortage will ease in 2009 and that, combined with other breakthroughs in solar technology, will combine to drive costs down. This will affect the bottom-line of existing renewable energy companies, especially those who fail to adapt to new ways of converting sunlight to electricity. In a reaction to the silicon shortage, several solar power companies have begun making photovoltaic cells from cadmium tellurid instead.

"The market is now approaching a tipping point: We project that the supply of solar modules will exceed demand in 2009, leading to falling prices and a shakeout among companies that aren't prepared to thrive in this new environment--particularly crystalline silicon players that haven't invested in new thin-film solar PV technologies," the report said.

However, the global solar power industry is approaching a boom period, as demand for photovoltaic panels and cells increases. Annual growth of solar in the US will hit 27% this year, becoming a $70 billion market by 2012.

Analysts are predicting a solar shakeup, with companies either dropping out of the market altogether or merging. Consumers will be the winners in the upcoming shakeup, as manufacturers of solar panels are forced to lower prices to compete for market share. In a recent Australian presentation by Suntech one of the largest solar module manufacturers it was predicted that within five years the cost of electricity supplied via the energy retailer will be on parity with the cost of electricity supplied by solar power systems.

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