Bloomberg published a story that blames an apparent global shortage of photovoltaic panels on the huge success of the solar industry.

Solar Boom

The story explains that oversupply pushed prices through the floor, making solar power more competitive and driving up demand. It also dragged dozens of manufacturers into bankruptcy, and slowed capital investment at the survivors. With installations expected to swell as much as 29 percent this year, executives are bracing for the first shortfall since 2006.

Scarcity will benefit the biggest manufacturers; and a shortage may slow development outside the top markets in Asia and North America if suppliers favour their largest customers. Shipments to large, utility-scale solar farms may get priority over smaller, rooftop systems, threatening one of the industry’s fastest-growing markets.

The looming shortage shows the rapid expansion of the solar energy industry–which may install as much as 52 gigawatts this year and 61 gigawatts in 2015. That’s up from 40 gigawatts in 2013, and more than seven times what developers demanded five years ago, according to Bloomberg New Energy Finance.

The industry has about 70 gigawatts of production capacity, New Energy Finance estimates, including a significant amount of older equipment that’s not profitable. The supply-demand balance is tighter than those numbers suggest. De Haan estimates capacity at about 59 gigawatts, excluding manufacturing lines that are out of date or obsolete.

Derick Lila
Derick is a Clark University graduate—and Fulbright alumni with a Master's Degree in Environmental Science, and Policy. He has 8+ years of solar industry research, marketing, and content strategy experience.

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