Solar Demand Outstripping Supply

Jordan Kessler at the NRDC Action fund blog takes note of a recent New York Times article (reposted at CNET) that shows the suppliers of solar panels simply aren't able to keep up with the quickly growing demand.

American suppliers for the solar energy industry say that burgeoning demand both domestically and overseas, a weak dollar and shortages of raw material have created back orders of several months on electricity-generating photovoltaic, or PV, panels.

"For all the years I've been doing this," said Daryl Dejoy, owner of a solar installation company in Penobscot, Me., "I could get all the solar panels in the world and no customers. Now I have all the customers in the world and no product."

Executives of American solar manufacturers and industry groups say the global solar market has grown roughly 40 percent annually in the last five years, driven in large part by Germany. Under an incentive program championed by that country's Green Party, German businesses and individuals with solar equipment can sell power they create to utilities at above-market rates. The utilities pass the excess cost on to their customers.

"It's giving Germans a solid 15 to 20 percent return on equity," said Rhone Resch, president of the Solar Energy Industries Association, the trade group for the American solar industry. "You're seeing a lot of companies in Germany start venture capital units based on solar farm development. People are even putting panels up on barns."

Right now, things are at a standstill, but representatives of the industry predict that the growing demand, as well as newer technologies, will be able to help suppliers meet demand:

...[Noah] Kaye, of the Solar Energy Industries Association, said that California's incentives could entice suppliers to increase production for the domestic market.

And his boss, Resch, said the shortage of customary solar resources provided an opportunity for producers of newer "thin film" solar panels. These panels, which can be rolled up for portability or installed on curved surfaces, are now produced in relatively small quantities by several Silicon Valley manufacturers.

"The solar energy industry is diverse," Resch said, "and will meet the challenges the market presents."

An embarrassment of riches, no doubt. It will be interesting to watch the solar panel industry deal with this new (and probably welcome) problem.

Technorati tags: solar power, market