Lower Prices for U.S. Solar in 2010?

The trouble with reading any analyses, reports or simple statements from industry experts is how difficult it can be to sift through the mass of material. Differentiating sound judgment from pure noise, or attempts at manipulation from a desire to present balanced viewpoints—these are the challenges that face anyone with an interest in a burgeoning field, especially one as (relatively) new as solar.

But Roger Efird, Suntech Power Holdings’ managing director for business development in the United States, may be onto something when he predicted yesterday that planned cuts to Germany’s solar incentives may incite solar manufacturers to ship their excess products to the U.S., thus forcing stateside prices for solar equipment downward. As the world’s top market for photovoltaic solar systems—it represents about 50% of the global market—Germany has long served as a bellwether and beacon of hope for the solar industry. And so, with the German government ready to implement a 15% cut on prices paid for roof-mounted solar power systems starting April 1, some panels bound for Germany will surely end up across the Atlantic.

From Reuters:

Solar companies have struggled in the past year as a glut of supplies pressured module prices by about 40 percent, squeezing profit margins in the nascent industry, and the additional supplies that had been destined for Germany will push U.S. prices even lower.

Efird foresees anywhere from a 10% to a 15% decline in price, not only from the excess of solar product but also increased numbers of manufacturers, who might have sold in Germany before but who are setting their eyes on a market with more potential. It’s an issue with overall supply.

“Anything that happens in Germany has a ripple effect,” [Efird] told the RETECH energy conference.

Such an outlook, of course, is excellent news for U.S. consumers and anathema to manufacturers everywhere, although it is possible that increased sales of solar systems—triggered by their lower prices—may insulate somewhat against the potential losses of the drop in price. (Like Wal-Mart, but on a much smaller scale: dirt-cheap prices, huge quantities of sold product, large revenues.) Thoughts on whether or not this will come to pass?