Image credit: iSuppli

According to iSuppli, a market forecasting service, there is going to be a downturn on the global photovoltaic market in 2009. The forecast downturn may in fact be a positive change, one that is going to yield a more mature market and supply chaing, once growth comes back.

Some forecast figures include a 32% decline in installed PV systems, from 5.2 GW in 2008 to about 3.5 GW in 2009. Revenue generated by photovoltaic systems will also decline by about 40% due to the decrease in price per solar watt during 2009 by about 12%, bringing total revenue to about US$ 18 billion, down from US$ 30 billion in 2008.

For year the solar power industry has enjoyed growth, inviting a great number of newcomers to the market. These new companies all want a share of the growing market, which resulted in overproduction – the cause for a drop in price and revenue. The forecast declines are going to enable the market to achieve a more balanced state between supply and demand.

iSuppli further determined that the single most important event that brought the solar market slowdown is a drammatic decrease in installed capacity in Spain, the leader in the photovoltaic power industry. Having accounted for about 50% of all PV installations around the world in 2008, it is no wonder that a sharp decline of PV installation in Spain has had such a strong effect on the overall state of the industry. Then, of course, there is the global credit crunch effect that simply has a braking effect on all aspects of business.

The PV industry remains one of the most interesting in the energy sector, as it still yields good retrun on investment, and the new changes, bringing lower costs of solar electricty, will open up new markets, previously "unaware" of photovoltaics as a source for producing electricity.