Solar Module Oversupply is Good for Homeowners
An investment analyst calls SolarTown, inquiring about trends in the solar panel market for 2011, particularly the supply of modules. It reminds me of the study I heard about in business school that if you ask 100 of the leading economists whether interest rates will rise or fall, 42% will get it right.
You can pay a lot of money for analyst reports, but with the solar energy market expanding rapidly and incentives seemingly changing day to day, it is hard to predict supplies. That has been a challenge for us, especially last year, but we think that we did well by our customers to secure modules at good prices. Customers are inventory averse, even if they can get a good deal. Their business is installing solar energy systems, not playing the solar module market. They understandably want their modules delivered soon after they place their order.
When there is an oversupply in modules, as there is now, fulfilling customer orders is relatively easy. But last year, when solar modules were being redirected to Germany and other European countries, the supply of certain panels could dry up on any given day.
This year, the oversupply of solar modules means that prices are again falling as manufacturers are trying to unload older models of solar panels and stale inventory. If you are a homeowner that wants to buy solar panels, you should get a good discount today. You may end up paying the same as you did last year, but you should get a better quality and more efficient panel–or you can purchase a discount panel at a good reduction in price.
As the weather gets better and demand increases throughout the year, We expect that the excess supply will be absorbed. We expect that prices will stabilize. At least we expect to be 42% right.