It's not all bad. "The current 'Solar Cycle' is severe due to changes in policy and the economy, but another boom will come and the industry will continue to grow and mature."
Stefan de Haan, senior analyst of photovoltaics at iSuppli says the over-supply is going to be monstrous. "Our actual numbers translate into a module oversupply of 90% this year. This is the peak of the module "glut". From 2010 on, the situation will ease due to adjusted production volumes and increased end-user demand."
So, who's in trouble? iSuppli's de Haan mentions Solon (one of the biggest European producers) and new polysilicon manufacturers using the "Siemens" process, many of them from China.
Climatewire points to to Advent Solar, DayStar Technologies and Blue Square Energy as "among the solar companies in the United States that are feeling the pinch and could be shaky."
But why are big fish like First Solar (FSLR), SunPower (SPWRA) and Canadian Solar (CSIQ) -- who all turned in good second quarter financial results -- doing well?
"In most cases, costs will be decisive," says de Haan. First Solar benefits from a cost advantage, SunPower has a better brand so it can command a premium, and "they benefit from the developing Californian market - small in absolute numbers, but growing significantly."
Adds Annis: "The PV supply chain is very broad based. The effects of the glut affect different companies quite differently. The companies you mention are all market leaders, are vertically integrated, benefit from scale of manufacturing and long term supply contracts. They have low costs per watt and even with the dramatic reduction in module pricing, costs may still be above pricing and they remain profitable. It is the smaller, non differentiated makers, with much higher costs, that feel the glut the most."
