What market analysts are reporting as bad news for American solar manufacturers will probably turn out to be a positive sign for consumers: a Goldman Sachs analyst reported yesterday that they expect solar equipment costs to continue to fall this year.
China’s commitment to what Goldman-Sachs analyst Amy Song refers to as a “vicious cycle” of solar equipment production assisted by illegally high subsidies and a disregard for international criticism, is the well-cited cause of U.S. solar panel manufacturers’ troubles.
Song believes that even the U.S. Department of Commerce tariff ruling last month won’t stilt Chinese solar production.
Aggressive Chinese investment in solar technology will result in an oversupply of equipment, largely in the United States, keeping solar module prices low throughout 2012, according to Song.
Solar panels already cost 50 percent less now than they did at this same time in 2009. An additional drop of nearly 30 percent is expected over the course of the next 12 months.
Germany, still regarded as the world’s largest solar market despite recent changes in their subsidy program structure, has continued to show high demand for solar. Japan is also becoming a strong contender in the international solar marketplace with a new “generous” renewable energy incentive program about to take effect.
In response to the competition from China, the U.S. is considering raising tariffs still higher in order to bring balance to the American market. The European Union may follow the U.S.’s example, causing a bigger headache for Chinese manufacturers looking to cash in on the solar boom.