2009 forecast for solar market: Mostly cloudy

Expect the photovoltaics (PV)  industry to see a major market drop this year, warns electronics market analyst iSuppli.

The firm bases its forecast on the industry’s overcapacity, along with fast-dropping PV prices and anemic demand in the face of the struggling global economy. Another contributing factor is Spain’s 500-megawatt cap on development this year, following last year’s expansion of 2.5 gigawatts.

iSuppli predicts that worldwide, installations of photovoltaics will reach just 3.5 gigawatts this year, compared to 5.2 gigawatts in 2008. Combined with the drop in PV prices per watt, that decline will translate into a 40.2 per cent reduction in global revenues, from $30.5 billion last year to $18.2 billion in 2009.

While the firm’s analysts say the PV market remains attractive for its return on investment, they say the industry isn’t likely to see a rebound in installations and revenues until 2011 and beyond.