Goldman Sachs predicts solar module prices to drop 15% next year

[bananas]

Solar sector shakeout looms as credit crunch bites

Tue Nov 4, 2008 9:42am EST
By Eva Kuehnen and Christoph Steitz - Analysis

FRANKFURT (Reuters) - Many of the world's solar energy companies could fail or fall into the arms of stronger rivals as the financial crisis raises borrowing costs and as solar module prices fall.

Any such shake-out would in turn precipitate consolidation in the industry, which has for years been attracting heavy investment and government subsidies that have driven supply ahead of demand.

"In our view, too much solar capacity has been added relative to demand, and will lead to oversupply," Goldman Sachs analysts wrote, adding that the consequences would drive module prices down by about 15 percent next year.

Oversupply and an easing of demand as economies slow will help the cost of photovoltaic solar energy fall in line with the cost of conventional electricity -- so-called "grid parity" -- which will ultimately give the sector a boost, but not before many companies have fallen by the wayside.

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http://www.reuters.com/article/GCA-BusinessofGreen/idUSTRE4A34JS20081104?sp=1

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