Technical Report

NREL/TP-6A2-46713

September 2009

The Effects of the Financial 

Crisis on Photovoltaics: 

An Analysis of Changes in 

Market Forecasts from 

2008 to 2009 

John E. Bartlett

New West Technologies, LLC

Robert M. Margolis

National Renewable Energy Laboratory

Charles E. Jennings

Financial Analytics Consulting Corporation
National Renewable Energy Laboratory

1617 Cole Boulevard, Golden, Colorado 80401-3393

303-275-3000 • www.nrel.gov

NREL is a national laboratory of the U.S. Department of Energy

Office of Energy Efficiency and Renewable Energy

Operated by the Alliance for Sustainable Energy, LLC

Contract No. DE-AC36-08-GO28308

Technical Report

NREL/TP-6A2-46713

September 2009

The Effects of the Financial 

Crisis on Photovoltaics: 

An Analysis of Changes in 

Market Forecasts from 

2008 to 2009 

John E. Bartlett

New West Technologies, LLC

Robert M. Margolis

National Renewable Energy Laboratory

Charles E. Jennings

Financial Analytics Consulting Corporation

Prepared under Task No. PVD9.1210
NOTICE

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recommendation, or favoring by the United States government or any agency thereof. The views and 

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iii

Acknowledgments

The authors would like to thank the following people for providing helpful comments on draft 

versions of this report: Karlynn Cory (National Renewable Energy Laboratory), Sam Dubinsky 

(Oppenheimer & Co), Vishal Shah (Barclays Capital) and Christopher Cameron (Sandia National 

Laboratories). The authors also thank Nick Allen (Morgan Stanley), Joe Balzano (Lazard Capital 

Markets), Hari Chandra (Deutsche Bank), Jenny Chase and Julia Wu (New Energy Finance), Brian 

Lee (Citi Investment Research), Jeff Osborne (Thomas Weisel Partners), Robert Stone (Cowen & 

Company), Ted Sullivan (Lux Research) and Ahmar Zaman (UBS Investment Research) for sharing 

their insights on the photovoltaic industry. The authors are grateful for funding support from the 

U.S. Department of Energy. 
iv

Table of Contents

Purpose and Methodology .....................................................................................................................1

Introduction............................................................................................................................................1

Polysilicon and PV Module Production Forecasts.................................................................................3

Polysilicon Production Forecasts.....................................................................................................3

Figure 1: Total Polysilicon Production......................................................................................3

Figure 2: Polysilicon Production by Technology ......................................................................4

Figure 3: Polysilicon Production by End Market ......................................................................5

PV Module Production Forecasts....................................................................................................6

Figure 4: Total PV Module Production .....................................................................................6

Figure 5: C-Si PV Module Production.......................................................................................7

Figure 6: Thin Film PV Module Production..............................................................................8

Figure 7: Thin Film PV Module Production by Technology.....................................................9

PV Module Demand Forecasts............................................................................................................10

Figure 8: Global PV Module Demand.....................................................................................10

Regional PV Module Demand Forecasts.......................................................................................12

Figure 9: Europe PV Module Demand ....................................................................................12

Figure 10: North America PV Module Demand......................................................................13

Figure 11: Japan and South Korea PV Module Demand.........................................................14

Figure 12: Rest of World PV Module Demand .......................................................................15

Market Equilibrium Forecasts..............................................................................................................16

Figure 13: PV Module Production versus Demand .................................................................16

Figure 14: Blended Polysilicon Prices.....................................................................................18

Figure 15: Average PV Module Prices....................................................................................19

Figure 16: Average PV System Prices.....................................................................................20

Addendum: Q3 2009 PV Forecasts......................................................................................................20

Conclusion ...........................................................................................................................................21

References............................................................................................................................................22
1

Purpose and Methodology

For the capital-intensive photovoltaic sector, the tightening of credit resulting from the global 

financial crisis has the potential to significantly inhibit the industry’s growth. More expensive and 

less available financing diminishes both PV demand, by making photovoltaic installations less 

attractive and more difficult investments, as well as PV supply, by curtailing the expansion of 

photovoltaic manufacturing capacity. Indirect effects from the financial crisis, such as lower wealth 

and income, reduced natural gas prices and expansionary fiscal policies, are also likely to affect the 

PV sector. 

To better understand the effects of the financial crisis on the photovoltaic industry, we 

surveyed the market forecasts of industry analysts, provided that they had issued projections during

both the third quarter of 2008 and the first quarter of 2009.1,2,3

 While this sample cannot capture the 

entire range of opinions about the PV industry, it includes analysts from over a dozen financial, 

research and consulting firms that closely follow the sector. In this paper, we analyze the median 

and range of the forecasts made in Q3 2008 and Q1 2009 as well as the median and range of changes 

in forecasts made by the same analyst. From this analysis, we infer how the financial crisis has 

impacted industry expectations of supply, demand and pricing over the next several years.

Introduction

The photovoltaic industry requires substantial inflows of investment to finance corporations 

and projects. With respect to corporate finance, investment is generally in the form of government 

grants, venture capital, private equity, corporate debt and public equity. Depending on the 

company’s size and stage of development, these various types of investment enable corporate

operations and expansion. With respect to project finance, investment is generally in the form of 

debt, tax equity and private equity. Project finance is necessary for the development, construction 

and operation of PV installations.

The financial crisis has affected all types of PV investment, but the effect has not been equal, 

in direction or magnitude. For example, whereas public equity investment in photovoltaic 

companies declined by almost two-thirds from Q4 2007 to Q4 2008, venture capital and private 

equity investments in PV companies rose by over a third during this period.4

 1 Since industry research reports are often published infrequently and there is a lag between research and publication 

dates, some of the reports from Q3 2008 were published towards the end of Q2 2008 or around the beginning of Q4 

2008. Likewise, some of the reports from Q1 2009 were actually published at the beginning of Q2 2009. Dates for each 

of the reports are noted in the references. 

 While venture capital 

and private equity are not invulnerable to the financial crisis (VC and PE investments in photovoltaic 

2 While the financial crisis has its origins in the latter half of 2007, it was not until the bankruptcy of Lehman Brothers, 

the Federal Reserve Bank’s loan to AIG, the sale of Merrill Lynch to Bank of America in September 2008 and the 

resulting tightening of credit that the full extent of the crisis became apparent. The end of 2008 is thus a sensible 

division between pre-crisis and post-crisis forecasts. 3 For each PV and polysilicon forecast, with the sole exception of that for polysilicon prices, we required estimates from 

a minimum of four analysts to ensure a range of opinions.

4 New Energy Finance Desktop 3.0, http://www.newenergymatters.com, accessed May 20, 2009.
2

companies declined by over half between Q4 2008 and Q1 2009), they are more insulated from 

financial shocks than many other types of investment.5 In addition, the duration of use varies 

significantly between types of investment. While venture capital, private equity and public equity 

investments may be used over several years for company growth, project finance debt may need to

be spent quickly for the purchase of PV systems to take advantage of global subsidy rates that tend 

to decline annually. The effect of declining investment may thus have a more immediate impact on 

project development than corporate expansion. Differences among sensitivities of investment to the 

financial crisis and in duration of investment use imply that certain areas of the photovoltaic industry 

will be more adversely impacted than others.

While changes in investment are the most direct effects on PV of the financial crisis, there 

are also important indirect effects. First, the financial crisis and global recession have resulted in 

lower wealth and income, which will likely lower the aggregate demand for electricity as well as 

consumers’ willingness-to-pay for environmental initiatives.

6

 Second, commodity prices, 

particularly that of natural gas, have dropped significantly over the past year as the economic 

downturn has intensified. In markets where PV-generated electricity is a substitute for natural gasgenerated electricity, demand for PV will decline as a result. Lastly, the financial crisis and global 

recession have prompted expansionary monetary and fiscal public policies. Fiscal policies

promoting renewable energy through tax credits, rebates, government expenditures and other 

mechanisms will likely increase both demand and supply of PV.7

In Section 1, we examine the Q3 2008 and Q1 2009 forecasts for polysilicon production, by 

end market and by technology, and PV module production, including crystalline silicon (c-Si) and 

thin film technologies. In Section 2, we analyze the two sets of forecasts for photovoltaic module 

demand, both globally and on a regional level. After comparing production with demand forecasts 

in Section 3, we examine price estimates for polysilicon, PV modules and PV systems. Finally, we 

offer conclusions about the effect of the financial crisis and the current outlook for the photovoltaic 

industry.

 5 Ibid.

6 For example, the EIA Annual Energy Outlook 2009 reduced its forecast for 2015 electricity use by 2% compared to its 

2008 estimate. In markets that have Renewables Portfolio Standards (RPSs), such as many states in the U.S., a drop in 

electricity demand will reduce the amount of renewable energy needed to meet the RPS. 7 However, the financial crisis could also have the effect that governments are forced to cut incentive programs for 

renewable energy due to lack of funds.
3

Polysilicon and PV Module Production Forecasts

Polysilicon and PV module production are capital-intensive industries, and thus the growth

of both sectors is vulnerable to a reduction in available financing.8 Furthermore, a decrease in future 

demand for PV will diminish the need for greater module production, which in turn will lower the 

need for additional polysilicon. Polysilicon production is worthy of individual attention, as it is the 

feedstock for a large majority of photovoltaic modules and has historically experienced large 

fluctuations in price.

Polysilicon Production Forecasts

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120

160

200

240

280

2006 2007 2008 2009 2010 2011

Year

Total Polysilicon Production (kMt)

2008E Production

2009E Production 

Estimate Change

Sources: 1A, 1B, 2A, 2B, 3A, 3B, 4A, 4B, 5A, 

5B, 6A, 6B

Figure 1. Total polysilicon production

Figure 1 shows the forecasts for total polysilicon production and how those forecasts have 

changed between Q3 2008 and Q1 2009. The median estimates did not change substantially, with 

the median forecasts for 2010 and 2011 declining by only 5% and 8%, respectively. Despite the 

effects of the financial crisis, industry analysts still expect polysilicon production to grow from about 

64 kMt in 2008 to 179 kMt in 2011, a compound annual growth rate (CAGR) of 41%. However, the 

range of forecasts narrowed considerably, particularly the spread between the median and high 

estimates. For 2011, the high estimate decreased from over 253 kMt to less than 184 kMt. As 

shown in the Estimate Change line, one of the analysts lowered his forecast for 2011 polysilicon 

production by almost 80 kMt.

That the median estimates did not change significantly reflects the two determinants of 

polysilicon production, utilization and capacity, which cause production to be somewhat insensitive 

to current market conditions. First, the relatively low marginal costs of production result in high

 8 We analyze polysilicon and PV module production rather than supply or shipments, as production is presented more 

consistently across analysts. 

High

Median

Low
4

utilization rates, even when polysilicon prices decline.9 Second, the construction of polysilicon 

plants is time and capital-intensive, resulting in a delay of several years between planned and 

realized capacity additions. The long duration has the effect that polysilicon production capacity is 

slow to adjust to current market conditions, as was evident in early 2008 when a shortage of 

polysilicon resulted in spot market prices of $500 per kilogram.10 Conversely, even though future 

demand for PV modules (and thus polysilicon) has recently declined, additional polysilicon 

production capacity in various stages of development will still be coming on line over the next few 

years.

While the financial crisis had only a modestly adverse impact on median estimates, the high 

estimates for polysilicon production dropped markedly. In examining the differential effects of the 

financial crisis, it is important to distinguish new polysilicon capacity by incumbent producers,

which is comparatively probable, from new capacity by new producers, which is less certain. Prior 

to the crisis, analysts with higher estimates had assumed a greater probability of success for new 

producers than had more conservative analysts. However, the financial crisis caused the more 

optimistic analysts to significantly reduce their estimates of additional capacity from new producers, 

which are more vulnerable to a tight credit environment. This narrowed the differences of opinion 

among analysts. It is notable that the low estimate for 2011 polysilicon production remained 

unchanged.

0

25

50

75

100

125

150

2006 2007 2008 2009 2010

Year

Polysilicon Production (kMt)

0.0%

2.5%

5.0%

7.5%

10.0%

12.5%

15.0%

UMG-Si Market Share (%)

2008E UMG Polysilicon (left axis)

2009E UMG Polysilicon (left axis)

2008E Siemens/FBR-Si (left axis)

2009E Siemens/FBR-Si (left axis)

2008E UMG Share (right axis)

2009E UMG Share (right axis)

Sources: 1A, 1B, 2A, 2B, 3A, 3B, 4A, 4B, 6A, 

6B

Figure 2. Polysilicon production by technology

Figure 2 shows Q3 2008 and Q1 2009 forecasts for polysilicon production by technology. 

Siemens and Fluidized Bed Reactor (FBR) technologies are grouped together as both produce 

polysilicon of industry-standard purity (99.999999%, referred to as “six nines”). Upgraded 

 9 As long as the price of polysilicon exceeds its marginal costs, producers will maintain their operations. However, if 

prices decline below the marginal costs of higher-cost producers, those manufacturers will be forced out of business and 

production will decline significantly.

10 http://www.isuppli.com/NewsDetail.aspx?ID=19683, accessed August 25, 2009. 
5

Metallurgical Silicon (UMG-Si) represents a number of technologies that enhance the purity of 

metallurgical grade silicon, but not generally to the level of 99.999999%. Figure 2 illustrates that 

the financial crisis has had similar effects on new versus established polysilicon production 

technologies as it had on new versus established polysilicon producers. Whereas the median and 

high 2010 estimates for UMG have declined by 30% and 54%, respectively, the median and high 

2010 Siemens/FBR estimates have fallen only 6% and 12%. The greater decreases in UMG 

estimates reflect that it is both a new technology and produced by non-incumbent firms. In addition, 

as the price of Siemens/FBR polysilicon falls, the cost advantage of UMG-Si, which is less pure and 

causes diminished module efficiency, declines. More difficult project financing for UMG-based PV 

installations would further reduce UMG demand. The relatively larger drop in UMG versus 

Siemens/FBR production estimates is evident as well in the decrease in expected 2010 UMG market 

share from 14% to 10%.

0

25

50

75

100

125

150

2006 2007 2008 2009 2010

Year

Polysilicon Production (kMt)

2008E Polysilicon for Semiconductor Industry

2009E Polysilicon for Semiconductor Industry

2008E Polysilicon for Solar Industry

2009E Polysilicon for Solar Industry

Sources: 1A, 1B, 2A, 2B, 3A, 3B, 4A, 4B, 5A, 

5B

Figure 3. Polysilicon production by end market

After 2006, the solar industry surpassed the semiconductor industry as the largest consumer 

of high purity silicon feedstock. Figure 3 shows the forecasted continuation of this trend through 

2010 and how it has changed between Q3 2008 and Q1 2009. Even with the financial crisis, 

polysilicon for the solar industry is expected to increase from 45 kMt to 106 kMt between 2008 and 

2010 while production for semiconductors remains approximately constant at 23 kMt over that 

period. Moreover, the median estimates for polysilicon production for the solar industry in 2009 and 

2010 are almost unchanged whereas the median estimates for the semiconductor industry dropped by 

over 20% in each of those years. Although demand for both semiconductors and PV has decreased 

as a result of the financial crisis, only polysilicon production for semiconductors reflects the lower 

end-market demand. This may be the result of demand for polysilicon from the PV industry being 

more elastic with respect to price than polysilicon demand from the semiconductor industry, as well 

as the large amount of under-utilized cell and module capacity that can take up excess polysilicon. 

Under these conditions, excess polysilicon production resulting from lower PV and semiconductor 

demand would disproportionately go to PV, resulting in a smaller relative decrease for PV 

polysilicon production.
6

PV Module Production Forecasts

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10

15

20

25

30

35

40

2006 2007 2008 2009 2010 2011 2012

Year

Total PV Production (GW-dc)

2008E Production

2009E Production 

Estimate Change

Sources: 1A, 1B, 2A, 2B, 3A, 3B, 4A, 4B, 7A, 7B, 

8A, 8B, 9A, 9B, 10A, 10B, 11Ai-ii, 11Bi-ii

Figure 4. Total PV module production

Figure 4 illustrates forecasted PV module production through 2012 and how those forecasts 

have changed. As with estimates for polysilicon production, the median projections for PV module 

production changed only slightly between Q3 2008 and Q1 2009.11 Even in the face of the financial 

crisis, the recent median forecasts are for total module production to increase from 5.6 GW in 2008

to 21.3 GW in 2012, a CAGR of almost 40%. The high estimates, however, decreased significantly 

in the later years, with the high 2012 estimate declining from over 40 GW to approximately 31 GW.

The similar patterns between PV module and polysilicon production forecasts is not 

surprising given that a large majority of future polysilicon production is for PV modules and that a 

large majority of PV modules will continue to use polysilicon feedstock. Indeed, most PV module 

production forecasts are presented in a supply chain model, in which the starting point is total 

polysilicon production.12 

However, there are a couple reasons why actual PV module production might be significantly 

less, at least temporarily, than the amount of polysilicon production would imply. The first is if 

there are capacity bottlenecks within the supply chain, and module production is limited by wafer, 

cell or module manufacturing capacity. The second is if lower demand for PV modules results in 

cell and module producers cutting production. While low marginal costs have resulted, at least so 

far, in high utilization rates for polysilicon production, this has been less true for cell and module 

production. In the beginning of 2009, such leading manufacturers as SunPower and Energy 

 11 Interestingly, the median estimate that changed the most proportionately was that for 2008, which increased by almost 

18% as the full extent of 2008 production became evident.

12 We discuss the implications of this production modeling format more fully in Section 3. 
7

Conversion Devices reduced factory production in response to lower demand.13,14 In addition to the 

different cost structures of polysilicon versus PV cell and module producers, cell and module 

producers with differentiated products, brand awareness or strong balance sheets, such as SunPower, 

Sanyo, Sharp and Solarworld, have greater pricing power as compared to manufacturers of 

polysilicon, which is considered more of a pure commodity.

15

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20

25

30

35

2006 2007 2008 2009 2010 2011 2012

Year

C-Si PV Production (GW-dc)

2008E Production

2009E Production 

Estimate Change

Sources: 1A, 1B, 2A, 2B, 3A, 3B, 4A, 4B, 7A, 7B, 

8A, 8B, 9A, 9B, 11Ai-ii, 11Bi-ii

Figure 5. C-Si PV module production

Figure 5 illustrates the projected growth through 2012 of c-Si PV module production. As cSi is expected to account for a large majority of total PV module production over the next several 

years, the patterns in Figure 5 are almost identical to those in Figure 4. Specifically, median and low 

module production estimates are almost unchanged, whereas high estimates for 2011 and 2012 are 

greatly reduced. Moreover, the Estimate Change line indicates mostly downward revisions in c-Si 

production forecasts for the later years, as is the case for total module production. However, the 

recent median c-Si production forecasts reflect a 2008-2012 CAGR of 33%, somewhat less than the 

40% growth rate for total module production. 

 13 http://files.shareholder.com/downloads/SPWR/650364744x0xS867773%2D09%2D35/867773/filing.pdf, accessed 

August 25, 2009. 14 http://files.shareholder.com/downloads/ENER/572209609x0xS32878%2D09%2D27/32878/filing.pdf, accessed 

August 25, 2009. 

15 Moreover, module producers face more regionally-differentiated markets, and thus more regionally-differentiated 

prices, than do polysilicon producers due to the greater transportation costs for modules.
8

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2

4

6

8

10

2006 2007 2008 2009 2010 2011 2012

Year

Thin Film Production (GW-dc)

-10%

0%

10%

20%

30%

40%

50%

Thin Film Market Share (%)

2008E Production (left axis)

2009E Production (left axis)

Estimate Change (left axis)

2008E Market Share (right axis)

2009E Market Share (right axis)

Sources: 1A, 1B, 2A, 2B, 3A, 3B, 4A, 4B, 7A, 7B, 

8A, 8B, 9A, 9B, 11Ai-ii, 11Bi-ii

Figure 6. Thin film PV module production

Figure 6, which shows projections for thin film PV production and market share, illustrates 

the significant differences between expectations for thin film versus c-Si module production and the 

differential effects of the financial crisis. While Figure 6 shows only modest changes in median thin 

film production estimates as well as significant reductions in high estimates, as are also evident for 

c-Si, other patterns are markedly dissimilar for thin film production forecasts. 

First, the recent median estimates reflect substantially faster expected growth for thin film 

compared to c-Si production, with a 2008-2012 CAGR of 52% versus 33% for c-Si. Second, for thin 

film production, estimates were revised significantly upwards as well as downwards. In contrast, cSi production estimates were mostly decreased. The upwardly revised thin film forecasts have 

resulted in increased low estimates for every year, while the low c-Si production estimates decreased 

for 2010, 2011 and 2012. Considering these two areas of divergence between thin film and c-Si PV, 

it is notable that it is a thin film producer, First Solar, which has been among the least affected by the 

financial crisis in its production expansion. Although First Solar is unique among thin film 

producers, it accounts for a substantial fraction of thin film production. Moreover, given the number 

of promising thin film startups which received substantial funding in 2007 and 2008, there is a good 

chance of other thin film companies achieving scale within the next several years.

Even with increased low estimates and decreased high estimates narrowing the range of 

forecasts for thin film production, the range remains greater for thin film versus c-Si production 

forecasts. The greater uncertainty for thin film PV is sensible given that thin film faces technology 

and scale-up risks, which are less significant for the more mature crystalline silicon technology. 

However, the median forecasts for thin film market share suggest that thin film PV will overcome 

these obstacles. Not only did the median thin film market share estimates increase between Q3 2008 

and Q1 2009, but the recent estimates show consistent growth in thin film market share, whereas the 

old estimates have thin film market share peaking in 2010 and declining thereafter. 
9

0.00

0.25

0.50

0.75

1.00

1.25

1.50

1.75

2.00

2.25

2007 2008 2009 2010

Year

Production (GW-dc)

2008E CIGS Production

2009E CIGS Production 

2008E A-Si Production

2009E A-Si Production 

2008E CdTe Production

2009E CdTe Production 

Sources: 3A, 3B, 7A, 7B, 9A, 9B, 12A, 12B

Figure 7. Thin film PV module production by technology

Despite having projections from only four analysts and only through 2010, the forecasts of 

thin film module production by technology in Figure 7 yield several interesting insights. Most 

noticeable is the degree of uncertainty of production for each of the technologies, even though the 

projections go no further than two years into the future. Notwithstanding the considerable 

uncertainty, there is tremendous growth implied by the recent median estimates, with 2008-2010 

CAGRs of 70%, 85% and 96% for Cadmium Telluride (CdTe), amorphous Silicon (a-Si) and 

Copper Indium Gallium (di)Selenide (CIGS) production, respectively.

For CdTe, it is surprising that there is so much uncertainty in the estimates for 2009 and 2010 

production, and that the uncertainty increased between Q3 2008 and Q1 2009, given that First Solar 

has delivered such consistent results. First Solar accounts for virtually all of 2008 CdTe production 

of roughly 500 MW, and the company plans to have over 1 GW of total manufacturing capacity by 

the end of 2009. The sizeable range may be the result of divergent opinions regarding the prospects 

of new CdTe entrants, such as PrimeStar Solar and Abound Solar, as well as skepticism regarding 

the pace of First Solar’s expansion. Nonetheless, it should be noted that CdTe was the only thin film 

technology for which either the median or high 2010 production estimate increased meaningfully.

For a-Si, there are both established producers, such as Energy Conversion Devices, Sharp 

and Kaneka, as well as numerous entrants, many of which have planned to enter the market through 

the purchase of turnkey systems from Applied Materials or Oerlikon. However, given the capital 

expenditures necessary for the purchase of turnkey production lines, expansion of a-Si production 

from entrants has been curtailed by the tight credit environment. In addition, as PV module prices 

have fallen faster than non-module prices over the past year, non-module prices have risen as a 

proportion of total system prices. Since non-module prices per Watt rise as module efficiency 

declines, a-Si, which has the lowest efficiency of any of the principal PV technologies, has become 
10

less attractive.

16 It is noteworthy that the median 2010 estimate for a-Si production experienced the 

greatest absolute and proportional reduction of the thin film technologies. 

CIGS module production is starting from a very low base, a median 2008 estimate of just 104

MW, but is expected to grow substantially in the near term. The median projection for 2010 is 400 

MW, with low and high estimates of around 100 MW and 1000 MW, respectively. The enormous 

range reflects both the substantial scale-up and technology risks, as companies such as Miasole, 

Nanosolar and Solyndra expand commercial production, and also the promise of the technology, 

which has the potential for similar costs but higher efficiencies than CdTe or a-Si modules. The 

median 2010 estimate decreased by 18% and the low estimate by 74%, perhaps reflecting that 

technology and scale-up risks become greater hurdles in a credit-constrained environment. 

PV Module Demand Forecasts

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15

20

25

30

35

2006 2007 2008 2009 2010 2011 2012

Year

Total PV Demand (GW-dc)

2008E Demand 

2009E Demand 

Estimate Change 

Sources: 1A, 1B, 2A, 2B, 4A, 4B, 5A, 5B, 6A, 6C, 

9A, 9B, 10A, 10B, 13A, 13B

Figure 8. Global PV module demand

Figure 8 displays the forecasts for global PV module demand and how these estimates have 

changed from Q3 2008 to Q1 2009. The recent median estimates still indicate rapid growth, with 

demand increasing from 5.8 GW in 2008 to 18.7 GW in 2012, a four-year CAGR of 34%. However, 

the previous median demand estimates for 2008 to 2012 grew at a CAGR of 48%, with the decline in 

the projected growth rate due to a lower 2012 projection and a higher 2008 estimate. The upwardlyrevised estimate for 2008 demand is also responsible for the forecasted drop in demand between 

2008 and 2009.

 16 In addition, with the growth of utility-scale markets, the greater use of trackers has raised the value of higherefficiency modules.
11

Comparing Figure 8 to Figure 4, which shows PV production forecasts, suggests both

similarities and differences in the effects of the financial crisis on demand versus production. The

pattern of the high and low estimates for production and demand is very similar, with high estimates 

reduced considerably and low estimates nearly unchanged. However, the median estimates for 

2010-2012 demand have declined more significantly and consistently than those for production, a 

trend also reflected in larger downward median revisions in estimates for demand versus production. 

The greater change in demand estimates could indicate that demand for PV modules is more 

immediately sensitive to changes in financing costs and availability than is PV module production. 

PV module production is financed substantially by venture capital, private equity and public equity 

investments and spent over several years. Additionally, more mature module producers may fund 

expansions, in part or total, using operating income. In contrast, project finance debt (and tax equity 

in the case of the U.S.) must be raised continuously for the installation of new PV systems, and cash 

flow from operations is not generally a viable option for significant financing. More expensive 

financing may thus have a more immediate impact on PV module demand than on module 

production.

While the decline in fossil fuel prices over the past year would also lead to a reduction in PV 

demand, this effect is likely to be less significant than that of constrained and more expensive 

financing. In many large markets for PV, such as Germany, the feed-in-tariffs are based on the cost 

of renewable energy projects. They are not based on current electricity prices, and thus the return on 

an investment in PV is independent of fossil fuel prices. Even in markets where this is not the case,

prices of electricity, as an often-regulated commodity, may be somewhat insensitive to fossil fuel 

prices. 

Finally, the net direction of other indirect effects of the financial crisis on PV demand is 

unclear. Lower wealth and income would reduce aggregate electricity demand as well as 

consumers’ willingness-to-pay for the non-market environmental attributes of PV, but expansionary 

fiscal policies aimed at increasing the deployment of renewable energy (provided that governments 

have the available funds) would act in the opposite direction. 
12

Regional PV Module Demand Forecasts

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10

12

14

16

2006 2007 2008 2009 2010 2011 2012

Year

Europe Demand (GW-dc)

-50%

-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%

50%

60%

70%

80%

Europe Market Share (%)

2008E Demand (left axis)

2009E Demand (left axis)

Estimate Change (left axis)

2008E Market Share (right axis)

2009E Market Share (right axis)

Sources: 1A, 1B, 2A, 2B, 4A, 4B, 5A, 5B, 6A, 6C, 

9A, 9B, 13A, 13B

Figure 9. Europe PV module demand 17

Figure 9 shows the forecasts and estimate changes for PV module demand in Europe as well as 

Europe’s share of the global PV market. The most recent median forecasts are that European PV 

demand will increase from 4.7 GW in 2008 to 7.9 GW in 2012, a CAGR of 14%. A striking feature 

of Figure 9 is the large upward revision for estimated 2008 demand, due to far greater capacity 

installed in Spain than was previously anticipated, which partially accounts for a projected growth 

rate far below that of the global market. However, it is also the case that in 2010-2012, growth of 

the more mature European market is not expected to keep pace with that of the developing U.S. and 

Asian markets. This trend is reflected in European market share, which reached almost 80% in 2008 

but is expected to decline to 43% in 2012.

Between Q3 2008 and Q1 2009, estimates for future European demand were mostly revised 

downwards, albeit with considerable variation in the estimate changes. Despite a capped Spanish 

market and a relatively stable German market, the uncertainty of European demand remains very 

large, with the high 2012 estimate over four times the value of the low 2012 estimate. The broad 

range reflects divergent views on the near-term prospects for emerging European markets, 

principally Italy, France and Greece. While the feed-in tariffs are favorable in these countries, there 

may be bureaucratic and other factors that inhibit the growth of PV.18

 17 2008E Demand was aggregated from forecasts made after indications in late Q2 2008 that the Spanish government 

would place a cap on PV installations eligible for its feed-in tariff, eventually set at 500MW. This had a large impact on 

European and global PV demand, as Spain installed over 2 GW of PV in 2008. Market share estimates represent the 

median forecasts from Q3 2008 and Q1 2009, respectively.

 Lastly, it is notable that the 

18 For example, in France the feed-in tariff structure favors building-integrated photovoltaics (BIPV), currently a small 

sub-sector of the PV industry.
13

median market share estimates for 2009 through 2012 did not change significantly between Q3 2008 

and Q1 2009. While this is partially due to Europe’s large share of the global market, it also reflects

the analysts’ judgment that the impact of the financial crisis on the European market is roughly in 

line with the crisis’ impact on the global market.19

-2

-1

0

1

2

3

4

5

6

7

8

2006 2007 2008 2009 2010 2011 2012

Year

North America Demand (GW-dc)

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

35%

40%

North America Market Share (%)

2008E Demand (left axis)

2009E Demand (left axis)

Estimate Change (left axis)

2008E Market Share (right axis)

2009E Market Share (right axis)

Sources: 1A, 1B, 2A, 2B, 4A, 4B, 5A, 5B, 6A, 6C, 

9A, 9B, 13A, 13B

Figure 10. North America PV module demand 20

Figure 10 illustrates the projections and estimate changes for North American PV demand 

and forecasts for North America’s market share. Although the United States accounts for a large 

majority of North American demand through 2012 in these estimates, analysts also expect Canada to 

contribute meaningfully, particularly as a result of Ontario’s enhanced feed-in tariff. The median Q1 

2009 projections are for North American PV demand to increase from less than 400 MW in 2008 to 

almost 4.4 GW in 2012, a CAGR of 87%, making the region by far the fastest growing market for 

PV. This is also reflected in the rising projected market share for North America, growing from 6% 

in 2008 to 27% in 2012. While the increasing North American demand and market share are not 

surprising given its currently small market size, high-quality solar resource for much of the region’s 

population and large potential market, the expected rate of absolute and market share growth is

striking.

Between Q3 2008 and Q1 2009, almost all measures indicated improved expectations for the 

North American PV market.21

 19 Even as Europe’s share of the global market decreases from 2009 to 2012, the change between 2008E Market Share 

and 2009E Market Share for each year from 2009 to 2012 remains small.

 For 2010, 2011 and 2012, the median forecasts for demand and 

20 North America includes the United States and Canada for analysts that make projections by country rather than by 

region. Mexico and other North American countries are not expected to contribute substantially to PV demand in the 

near term.
14

market share increased and the median estimate change was positive. Although the high demand 

estimates did indeed decline, the low estimates rose, and in the case of 2012, the low estimate 

increased by over 75%. Consequently, the range for 2012 North American demand estimates has 

narrowed considerably and now reveals far less uncertainty than that which exists for the European 

market. The contrast between increased estimates for North American demand and decreased 

estimates for European demand between Q3 2008 and Q1 2009 reflects differences in policy changes 

and expectations in the two regions during that time period. Whereas the solar policy environment 

in Europe was comparatively stable at the end of 2008 and beginning of 2009, in the United States 

there was a new President, the passing of an economic stimulus bill that emphasized the deployment 

of renewable energy and the prospects of Federal legislation on climate and a national Renewable

Electricity Standard. In addition, the Canadian province of Ontario proposed a more generous feedin tariff in March 2009.22

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

2.5

3.0

2006 2007 2008 2009 2010 2011 2012

Year

Japan & S. Korea Demand (GWdc)

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

Japan & S. Korea Market Share (%)

2008E Demand (left axis)

2009E Demand (left axis)

Estimate Change (left axis)

2008E Market Share (right axis)

2009E Market Share (right axis)

Sources: 1A, 1B, 2A, 2B, 4A, 4B, 5A, 5B, 6A, 6C, 

9A, 9B, 13A, 13B

Figure 11. Japan and South Korea PV module demand 23

Figure 11 shows the forecasts for demand and market share and changes in demand estimates 

with respect to the combined markets of Japan and South Korea. Japan had the largest installed 

capacity of PV from 1997 until 2005, when it was overtaken by Germany. South Korea’s market 

development has occurred more recently, with the establishment of a feed-in tariff in 2006 to help 

the country reach its mandate of 5% of electricity generated from renewables by 2011. The 

combined markets are expected to grow from 500 MW in 2008 to over 1.8 GW in 2012, a CAGR of 

 21 While some of the Q3 2008 estimates were made prior to the extension of the U.S. investment tax credit (ITC), this 

does not appear to have exerted downward pressure on those estimates.

22 http://www.thestar.com/Business/article/604650, accessed August 25, 2009. 23 While other Asian markets, such as China and India, have great potential for PV, only Japan and South Korea to date 

have installed PV capacity greater than 100 MW. Moreover, Japan and South Korea are set apart from other Asian 

markets by their current state of economic development.
15

39%. While Japan and South Korea’s combined market share is expected to increase in 2009, 

assisted by the decline in European demand, it is projected to gradually decrease thereafter as 

markets in North America and the rest of the world grow more rapidly.

The changes in estimates from Q3 2008 to Q1 2009 are more mixed for the Japanese and 

South Korean market than for those of Europe or North America. Although the adjustments were 

generally positive for 2009 and 2010, they turned mixed thereafter. The positive changes for 2009 

and 2010 likely reflect the decision made by the Japanese government in December 2008 to reinstate 

subsidies for residential PV starting in January 2009, which had been withdrawn in 2005. For South 

Korea, many of the Q3 2008 estimates account for the October 2008 reduction in the country’s feedin tariff. Increased estimates made in Q1 2009 could be the result of greater visibility into South 

Korean demand several months after the incentive reduction occurred. 

-3.0

-1.5

0.0

1.5

3.0

4.5

6.0

7.5

9.0

10.5

2006 2007 2008 2009 2010 2011 2012

Year

Rest of World PV Demand (GWdc)

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

35%

Rest of World Market Share (%)

2008E Demand (left axis)

2009E Demand (left axis)

Estimate Change (left axis)

2008E Market Share (right axis)

2009E Market Share (right axis)

Sources: 1A, 1B, 2A, 2B, 4A, 4B, 5A, 5B, 6A, 6C, 

9A, 9B, 13A, 13B

Figure 12. Rest of world PV module demand 24

Figure 12 illustrates the demand and market share forecasts, as well as the demand estimate 

changes, for the rest of the world (ROW), which includes China, India, Australia, the Middle East 

and other emerging markets for PV. The recent median estimates envisage that ROW PV demand 

will increase from 390 MW in 2008 to almost 2 GW in 2012, a CAGR of 50%. As a result, the 

market share of ROW is expected to rise from 6.6% in 2008 to 13.5% in 2012. However, the 

uncertainty around these median estimates is vast. For 2012, the high demand estimate is over eight 

times the value of the low demand estimate, reflecting both the great potential but also the nascent 

state of these markets.

 24 It should be noted that the Q1 2009 estimates were all made prior to the June 2009 disclosure of India’s solar targets 

and that almost all of the estimates occurred before the announcement in late March 2009 of China’s first PV subsidy 

program, aimed at BIPV. Since March, China has announced an additional subsidy program for larger systems, and 

Chinese producers have signed letters of intent totaling GWs of installed PV capacity.
16

Between Q3 2008 and Q1 2009, the forecasts for ROW demand and market share declined 

almost universally. Low, median and high demand forecasts from 2009 to 2012 dropped, as did 

median market share estimates. Moreover, the Estimate Change bars reveal that analysts 

unanimously lowered their 2012 demand forecasts. That the financial crisis would have 

disproportionately adverse affects on ROW is reasonable, as projects in emerging markets generally

entail greater financial risk and are more vulnerable to an environment of tightened credit.25

Market Equilibrium Forecasts

-2

0

2

4

6

8

10

12

2006 2007 2008 2009 2010

Year

Excess PV Production (GW-dc)

-20%

0%

20%

40%

60%

80%

100%

120%

Excess PV Production (%)

2008E Excess Production (left axis)

2009E Excess Production (left axis)

Estimate Change (left axis)

2008E % Excess Production (right axis)

2009E % Excess Production (right axis)

Sources: 1A, 1B, 2A, 2B, 4A, 4B, 9A, 9B, 10A, 

10B

Figure 13. PV Module production versus demand 26

Figure 13 shows the absolute and relative differences between forecasted PV module 

production and demand through 2010.27 Production and demand projections are often made with 

separate bottom-up models, in which case estimated future years’ production and demand will not 

necessarily be equal.28

 25 However, there are exceptions to this. For example, the credit environment in 2009 has been more favorable in China 

than in the U.S. or Europe given the better-capitalized condition of China’s banking system.

 For PV module production, the starting point of bottom-up supply chain 

models is usually total polysilicon production, aggregated across incumbent and new producers. 

Polysilicon for solar is calculated by subtracting semiconductor polysilicon demand and adding back 

recycled material, and c-Si PV production is reached with assumptions about average grams of 

silicon per Watt, a cell-to-module conversion factor and inventory fluctuations in the supply chain

prior to module assembly. Adding thin film PV production, based on planned expansions of existing 

producers and entry of new firms, yields total PV production. For PV demand, analysts generally

26 Only includes forecasts from analysts who have provided both production and demand estimates. 27 Relative excess production equals (PV production – PV demand) / PV demand 28 Actually, production should be somewhat greater than demand to maintain a stable proportion of module inventory as 

the industry grows.
17

consider the available incentives, solar resource and electricity prices, by state, country or region, to 

determine the rate of return on investment in PV, from which they estimate demand.

The key missing short-term variables are price and capacity utilization, which are implicitly 

fixed in production and demand models, but will adjust in the real world so that supply/demand

equilibrium is reached. It is nonetheless useful to examine the trends in projected excess production

as they elucidate price projections, discussed in the next sections.

29 As illustrated in Figure 13,

recent median estimates for absolute and relative excess production increase dramatically from 2008 

to 2009 and 2010. For 2008, the median estimate for excess production was less than 10% and the 

low estimate was negative, implying that module inventory decreased in order to meet demand. 

However, for 2009 and 2010, the recent median estimates for excess production increase to 74% and 

109%, respectively, as production expansion outpaces demand growth. Moreover, between Q3 2008 

and Q1 2009, median estimates of 2009 and 2010 absolute and relative excess production have 

increased due to the greater adverse effect of the financial crisis on demand than on production.

This is not to suggest that analysts expect actual 2010 production to be over twice the level of 

annual demand.30

 29 It is difficult to compare the magnitude of different analysts’ projections of future excess production, as the price and 

utilization assumptions used in their models may differ. For instance, an analyst with a lower estimated excess 

production may be assuming a greater price reduction and/or lower capacity utilization than an analyst with a higher 

estimated value. The low estimates for 2009 and 2010 are likely examples of forecasts with such assumptions.

 Excess production will lead to a decline module prices, which will raise the 

quantity of modules demanded, and the prospect of lower prices will lead some firms to cut 

production (lower their capacity utilization) and other firms to cease production entirely. As 

previously noted, in early 2009, such leading PV module producers as SunPower and Energy 

Conversion Devices announced work furloughs or idling of manufacturing lines in response to lower 

demand.

30 It is also important to distinguish projected production from projected capacity, which forms the upper bound for 

future production. Production estimates assume a certain capacity utilization, which will result in divergence between 

projected production and capacity as utilization declines below 100%.
18

$0

$25

$50

$75

$100

$125

$150

$175

2008 2009 2010 2011 2012

Year

Blended Polysilicon Price ($/kg)

2008E Polysilicon Price

2009E Polysilicon Price

Sources: 8C, 8D

Figure 14. Blended polysilicon prices 31,32

Figure 14 shows forward contract prices for polysilicon, as surveyed at the end of 2008 and 

the beginning of 2009. Even as estimated in the late 2008 survey, future prices for polysilicon 

declined rapidly over time, from $165/kg in 2008 to $80/kg in 2012. Polysilicon prices peaked in 

early 2008, with prices on the spot market as high as $500/kg, as production capacity had lagged

rising demand from the PV industry. However, with expected production capacity expansions, 

which were often started years earlier, outpacing polysilicon demand in 2009 and afterwards, future 

contract prices declined substantially and persistently in the years after 2008. The financial crisis 

intensified this trend by diminishing polysilicon demand, reflected in the drop in forward prices of 

roughly 10% for each year between the late 2008 and early 2009 surveys.

 31 There were not a sufficient number of estimates of spot, long-term contract or, ideally, volume-weighted averages of 

spot and long-term contract prices to aggregate and analyze polysilicon price forecasts. However, given the importance 

of polysilicon prices to c-Si module costs, we show data from the New Energy Finance Silicon Price Index from 

December 2008 and March 2009. The data represents volume-weighted averages of prices of polysilicon forward 

contracts for delivery in each year from 2008 to 2012. As such, the prices listed for 2008 are below those of the spot 

market, which rose as high as $500/kg, and above long-term contract prices, which were less than $100/kg. 32 In 2008 or 2009 dollars depending on the year of the survey.
19

-$0.50

$0.00

$0.50

$1.00

$1.50

$2.00

$2.50

$3.00

$3.50

$4.00

$4.50

2007 2008 2009 2010

Year

PV Module ASP ($/W-dc)

2008E ASP

2009E ASP 

Estimate Change 

Sources: 1A, 1B, 2A, 2B, 7A, 7B, 10A, 10B, 

13A, 13B

Figure 15. Average PV module prices 33

Figure 15 shows the forecasted average module prices and estimate changes through 2010. 

The recent median projections are that module prices will decrease from $3.72/Watt in 2008 to 

$2.45/Watt in 2010, a CAGR of -19%. The trend is similar to that forecasted in Q3 2008, in which 

module prices were expected to decline at a CAGR of -17%. Even prior to the financial crisis, it was 

apparent that the increasing production capacity across the PV supply chain would lead to lower 

future module prices. Moreover, the subsidies in such large PV markets in Germany decline each 

year, and thus module prices must decline for developers’ margins and investors’ returns to remain 

constant. 

Although the 2008-2010 trend did not change significantly between Q3 2008 and Q1 2009 

projections, there was a downward shift in the median estimates for each year. This adjustment of 

expectations is also revealed in the Estimate Change bars, which are almost uniformly negative for 

2008, 2009 and 2010. The most prominent effect of the financial crisis on the PV industry has been 

higher financing costs, so other constituent expenses, including module prices, must decline to 

maintain constant margins and returns for developers and investors, respectively.

 33 Although the estimates do not always specify whether module prices are presented in real or nominal terms, the impact 

from inflation is minor given the four-year time horizon.
20

-$1.00

$0.00

$1.00

$2.00

$3.00

$4.00

$5.00

$6.00

$7.00

$8.00

2007 2008 2009 2010

Year

PV System ASP ($/W-dc)

2008E ASP 

2009E ASP 

Estimate Change 

Sources: 2A, 2B, 7A, 7C, 10A, 10B, 12A, 

12B

Figure 16. Average PV system prices 34

Figure 16 shows the forecasted average system prices and estimate changes through 2010. 

The recent median projections are that system prices will decrease from $6.08/Watt in 2008 to 

$4.21/Watt in 2010, a CAGR of -17%. As is the case with module prices, the Q1 2009 forecasted 

system price trend does not substantially differ from that expected in Q3 2008, in which the 2008-

2010 CAGR was -12%. The reasons for the downward price movement for systems are the same as 

those for modules, increases in production capacity across the supply chain outpacing demand 

growth and subsidies falling over time.35 Lastly, the downward shift in median forecasts between 

Q3 2008 and Q1 2009 as well as the negative estimate changes reflects the higher financing costs 

resulting from the credit crisis.

Addendum: Q3 2009 PV Forecasts

While various developments have impacted the outlook of the PV industry since the Q1 2009 

forecasts were made, the most dramatic change has been the reduction of prices throughout the PV 

supply chain. The extent to which prices have fallen from Q1 through the middle of Q3 2009, as 

well as the recently-forecasted price declines through 2010, has significantly exceeded what industry 

analysts expected in the beginning of the year. The additional drops in prices have important 

impacts on the dynamics of the PV industry.

 34 Although the estimates do not always specify whether system prices are presented in real or nominal terms, the impact 

from inflation is minor given the four-year time horizon. 35 However, the declines in recent median forecasted prices for 2009 versus 2008 is more pronounced for PV modules (-

30% year/year) than for systems (-23% year/year). This difference is likely the result of greater inventories and 

overcapacity within module production than that which exists in the system integrator and developer segment.
21

At the start of 2009, the spot price of polysilicon was roughly $150/kg.36 In the March 2009 

survey shown in Figure 14, the average contract price for polysilicon delivery in 2009 was $107/kg. 

However, the spot price dropped to $74/kg in May and $70/kg in August.37 It is worth noting that in 

the March survey, a polysilicon price of $70/kg was not reached until 2012. While polysilicon 

prices have appeared to stabilize over the summer, given that production costs at REC, Hemlock and 

Wacker Chemie are estimated to be below $30/kg, there is significant room for further price erosion 

as new capacity comes online.38 The low current polysilicon prices and potentially even lower 

future prices will further hinder the prospects of the less-pure UMG-Si.

For PV modules, which had averaged approximately $3.75/W in 2008, as shown in Figure 

15, the reduction in price has also been dramatic. While the median Q1 2009 estimate for average 

PV module price in 2009 was just over $2.60, by June, prices had already fallen to $2.40-$3.00 for 

c-Si modules and $1.70 for CdTe modules.39 Unlike prices for polysilicon, PV module prices 

continued to decline during the summer, dropping to $1.90-$2.60 for c-Si modules and $1.60 for 

CdTe modules by mid-August.40 The significant range for c-Si modules reflects Chinese suppliers 

on the low end, which have put considerable pricing pressure on European, U.S. and Japanese 

module producers. Based on historical price differences between suppliers, a 30%+ price premium 

for top-tier brands is unlikely to be sustained. 

While the range between Chinese and European, U.S. and Japanese module producers has 

increased in percentage terms, the difference between average c-Si prices and CdTe prices (from 

First Solar), has narrowed considerably. Given their lower efficiency, CdTe modules need to be 

priced 25-30 cents below c-Si modules to generate equivalent project returns.

41 The drop in c-Si 

prices prompted First Solar to institute a rebate program in Germany to maintain its sales growth. 

With a recently-projected average c-Si module price of $1.60 in 2010 (far below the median Q1 

2009 estimate of $2.45 for the average module price in 2010), CdTe modules will have to sell 

around $1.35 next year.42 This pricing pressure from c-Si modules will be even more intense on aSi, which is less efficient than CdTe, and on CIGS, being the least established technology. Whether 

thin film PV will continue to gain market share, as projected in Q1 2009 (Figure 6), is now less 

probable. 

Conclusion

The financial crisis has had a significant impact on the PV industry, primarily through 

increasing the cost and reducing the availability of investment into the sector. These effects have 

been more immediately experienced by PV installations than by production facilities, due to the 

different types and duration of investments, and thus PV demand has been reduced by a greater 

proportion than PV production. More expensive financing is also directly reflected in PV module 

 36 New Energy Finance Solar Spot Survey, August 2009. 37 Ibid. 38 Ibid. 39 UBS Investment Research, Global Solar Industry Update. August 19, 2009. 40 Ibid. 41 Deutsche Bank, First Solar: Stellar 2Q09 performance; spurring 2H09 demand. July 30, 2009. 42 Deutsche Bank, First Solar: Resetting 2010 expectations. August 19, 2009.
22

and system price declines, as other constituent costs have had to decline to maintain necessary rates 

of return for PV installations.

Furthermore, in regards to pricing, the financial crisis has had the effect of accelerating a 

downward trend that was forecasted well before the tightening of credit to the sector. With the 

substantial ramp in capacity across the PV supply chain beginning several years ago, it was evident 

that the production shortfalls and bottlenecks which existed in the beginning of 2008 would 

disappear as supply came on line. By reducing demand more than production, the financial crisis 

has accelerated previously-expected PV overcapacity and resulting price declines. However, the 

extent of the price declines for c-Si modules has been far beyond what industry analysts had 

anticipated.

While the further decline in module prices will increase the returns on investments in PV 

systems, leading to more installations, the current demand picture is complicated by the uncertain 

nature of public policies that incentivize PV. For example, the importation of lower-priced Chinese 

modules generated pre-election opposition in Germany to the level of the country’s feed-in-tariff.43 

On the other hand, China and India have both recently announced incentive programs and targets for 

PV installations, but their near-term impact is unclear.

References

1A) Cowen & Co. Industry Outlook: Global PV Supply/Demand. August 28, 2008.

1B) Cowen & Co. Industry Outlook: Industry Hoping for Help from Stimulus Bill. January 12, 2009.

2A) Morgan Stanley. Solar Devices: Dislocation and Inflection. November 14, 2008.

2B) Morgan Stanley. Solar Devices: Dislocation – Industry Reset. March 24, 2009.

3A) Prometheus Institute for Sustainable Development and PV Energy Systems. Photovoltaic 

Markets, Technology, Performance, and Cost to 2015. Presented at Solar Power International. 

October 13, 2008.

3B) Greentech Media Inc. and Prometheus Institute for Sustainable Development. PV Technology, 

Production, and Cost, 2009 Forecast: The Anatomy of a Shakeout. January 2009.

4A) Thomas Weisel Partners. Alternative Energy: Solar Demand Very Uncertain Entering 2009 

Given Tight Credit Conditions; Oversupply Lurking Right Around the Corner. October 13, 

2008.

4B) Thomas Weisel Partners. Alternative Energy; Presentation Materials to Investors. April 2009.

5A) Oppenheimer & Co. PV Market Forecast. September 2008.

5B) Oppenheimer & Co. PV Market Forecast. April 2009.

6A) Lehman Brothers. Solar Insights 4: Solar Demand Analysis. September 9, 2008.

6B) Barclays Capital. 2009 Solar Demand Outlook. March 23, 2009.

 43 Deutsche Bank, Rising negative media bias on German Solar FITs. August 17, 2009.
23

6C) Barclays Capital. Solar Energy Handbook: The Second Growth Phase of Solar Era. May 1, 

2009.

7A) Deutsche Bank. Solar Photovoltaic Industry: Solar PV Industry Outlook and Economics. May 

27, 2008.

7B) Deutsche Bank. Solar Photovoltaic Industry: Looking Through the Storm. January 21, 2009.

7C) Deutsche Bank. Personal Communication. May 2009.

8A) New Energy Finance. Insight Services: Tough Times for PV Manufacture. October 28, 2008.

8B) New Energy Finance. PV Market Outlook: It’s Darkest Before the Dawn. March 31, 2009.

8C) New Energy Finance. New Energy Finance Silicon and Wafer Price Index. December 2008.

8D) New Energy Finance. New Energy Finance Silicon and Wafer Price Index. March 2009.

9A) Citi Investment Research. US Solar Stocks: Market Forecast. October 21, 2008.

9B) Citi Investment Research. US Solar Stocks: Inventory Has Yet to Peak, so It’s Still Too Early. 

March 6, 2009.

10A) Lazard Capital Markets. Solar Sector: 3Q Preview. November 4, 2008.

10B) Lazard Capital Markets. A Framework for Assessing Solar Stocks in Turbulent Times. April 2, 

2009.

11A) Navigant Consulting. Photovoltaic Manufacturer Shipments & Competitive Analysis 

2007/2008 (i - Conservative Scenario; ii - Accelerated Scenario). April 2008.

11A) Navigant Consulting. Photovoltaic Manufacturer Shipments & Competitive Analysis 

2008/2009 (i - Conservative Scenario; ii - Accelerated Scenario). April 2009.

12A) Lux Research. Solar State of the Market Q3 2008: The Rocky Road to $100 billion. September 

2008.

12B) Lux Research. Finding the Solar Market’s Nadir. February 2009.

13A) UBS Investment Research. Global Recession Impacting Solar’s Growth. October 28, 2008.

13B) UBS Investment Research. Darwin’s Theory – Survival of the Fittest. February 26, 2009.
F1147-E(10/2008)

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September 2009

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Technical Report 

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4. TITLE AND SUBTITLE

The Effects of the Financial Crisis on Photovoltaics: An Analysis of 

Changes in Market Forecasts from 2008 to 2009 

5a. CONTRACT NUMBER

DE-AC36-08-GO28308

5b. GRANT NUMBER

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6. AUTHOR(S)

J. Bartlett, New West Technologies, LLC; 

R.M. Margolis, National Renewable Energy Laboratory; 

C.E. Jennings, Financial Analytics Consulting Corporation

5d. PROJECT NUMBER

NREL/TP-6A2-46713

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PVD9.1210

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14. ABSTRACT (Maximum 200 Words)

To examine how the financial crisis has impacted expectations of photovoltaic production, demand and pricing over the 

next several years, we surveyed the market forecasts of industry analysts that had issued projections in 2008 and 2009. 

We find that the financial crisis has had a significant impact on the PV industry, primarily through increasing the cost and 

reducing the availability of investment into the sector. These effects have been more immediately experienced by PV 

installations than by production facilities, due to the different types and duration of investments, and thus PV demand 

has been reduced by a greater proportion than PV production. By reducing demand more than production, the financial 

crisis has accelerated previously expected PV overcapacity and resulting price declines. 

15. SUBJECT TERMS

solar photovoltaics; solar energy; PV; analysis; NREL; financial crisis; PV industry; PV production; PV pricing; PV 

demand; PV market; PV installations; Robert M. Margolis; John E. Bartlett; Charles E. Jennings

16. SECURITY CLASSIFICATION OF: 17. LIMITATION 

OF ABSTRACT

UL

18. NUMBER 

OF PAGES

19a. NAME OF RESPONSIBLE PERSON

a. REPORT

Unclassified

b. ABSTRACT

Unclassified

c. THIS PAGE

Unclassified 19b. TELEPHONE NUMBER (Include area code)

Standard Form 298 (Rev. 8/98)

Prescribed by ANSI Std. Z39.18