Solar Firms Are Bracing for The Possible Effects on The Solar Market

Solar firms are bracing for the possible effects on the solar market due to the debt crisis in the US. The debt crisis could cause a downturn of the global economy and curb installation demand. Demand in the solar market has been returning in third quarter from a gloomy second quarter following clearer government policies in Germany and Italy. But prices have remained low, and solar firms worry that a collapse of confidence will hit the solar market. The US debt crisis has been affecting the stock markets around the world. According to industry sources, solar firms have not yet seen fluctutations caused by the uncertainties in the financial sectors. But from the experience of the financial crisis in 2009, orders of solar products usually show reactions to the global economy a little slower. The effects will likely hit end markets first and work its way up the supply chain. Even though Europe remains the major market for the solar industry, US has been seen as a market with lots of potential for solar installations. Hence, there are many ways the debt crisis can affect the industry including lack of consumption and unwillingness to lend money to firms by the bank. Furthermore, budgets for the incentive programs might be cut. Industry sources noted the government might discourage solar installations so as to reduce spending. Consumers' expectation is another factor. The debt crisis might result in a lack of confidence and decreased consumption. The debt crisis might speed up integration of the supply chain and force firms with less competitiveness to exit the market, concluded industry sources. Source: www. digitimes. com