International Solar Panel Market Exceeds Supply

Both the Chinese and U.S. governments have recently stepped up efforts to stimulate the solar energy industry. Investors are also very optimistic about the stimulus policies of the two countries, but due to the over-saturation of the solar market, professionals predict that the effectiveness of the policies will begin as early as next year.

In order to stimulate the development of the fledgling solar energy industry, the United States, the world's largest economy, and China, the third largest economy in the world, have proposed to increase subsidies or reduce taxes for the solar energy industry. However, the market demand for Solar Panels is still not strong. Due to the economic recession, the investment in renewable energy projects in both countries has not been put in place. According to Christine Wang, an analyst at HSBC, the development environment of the solar energy industry is still very difficult, and the solar energy sector will still be in an oversupply situation. Although the market's stimulus will increase, the stimulus will not generate demand in the short term. The effect of the stimulus may be as early as this year or early next year.

After the Chinese government introduced a key solar photovoltaic support policy, the shares of many domestic solar energy companies rose sharply. For example, shares of Wuxi Suntech Power Holdings Co., Ltd., Yingli Green Energy Holdings Co., Ltd., JA Solar Energy Co., Ltd. and LDK Solar Energy Co., Ltd. More than 90% growth. At the same time, U.S. solar companies, such as SunPower, the largest solar module manufacturer in the US, and solar energy and solar energy and energy conversion equipment companies, were up 67%, 50%, and 24%, respectively.

However, analysts believe that solar energy stimulation plans in China and the United States will slow down the supply of solar panels by next year, and it will take three years to reach a balance between supply and demand. Before 2012, China and the resurgent US market are still not enough to digest production capacity.

Solar energy products still have a huge backlog of solar energy market saturation and a large backlog of products. The backlog has halved the price of solar modules, and since January, the price of polysilicon, the main raw material for the solar industry, has remained at US$65 per kilogram. Last year, the maximum price of polysilicon reached 500 US dollars, the sharp decline in prices for solar panels and polysilicon market, the profitability of the space dropped sharply. Analysts believe that before the global economic recession improves, the prices of solar panels and polysilicon will not bottom out.

However, the United States and China’s government’s support for the solar industry will release a lot of demand. Experts predict that demand for solar cell modules will increase by 76% next year to 10.5 megawatts, of which the US will contribute 1.5 million watts of new demand, and China’s new demand will be 0.5 megawatts.

The U.S. government stimulus plan has been criticized by various circles for its slow implementation. U.S. government grants and grants to renewable energy companies are included in the Obama administration’s economic stimulus package passed in February, but the U.S. Department of Energy last month issued rules and regulations for the implementation of these project plans.

JPMorgan analyst Christopher said that the earliest time the U.S. government’s solar energy stimulus plan can work is 2010. This means that the dilemma of the new energy industry is difficult to become an effective means for the U.S. federal government to overcome its economic difficulties in the short term.