Global Solar Investment to See Brighter Days in 2010
More and more, I get the feeling that investment analysts think the economy has turned a corner, especially in regards to solar power. Every day, there is a new article on the wire about this or that prediction for solar power in the new decade. Thankfully, most of them are positive. I’ve written about a few them recently, including the sharp drop in solar costs in 2008 and the expectation that the Green Tech industry will lead the economic recovery.
On solar’s behalf, positivity is an easy assertion when factoring in China, which is well ahead of the rest of the world in escaping the recession, and whose major solar companies are flourishing. Trina Solar and Suntech Power Holdings are just two Chinese firms soaring high thanks to increased government incentives and China’s high market share of solar manufacturing.
U.S. solar has been a bit more sluggish in recovery. Still, with the U.S. economy showing signs of growth, and at the least, stabilization, prospects are looking up for 2010. Reuters gives a few fairly common reasons for positivity.
For one, demand is expected to rise in 2010, beginning almost immediately. This will help curb the rapid fall in prices and should facilitate a rise in profit margins for many solar companies barely sliding through the recession. The fall in prices, up to a 50 percent drop in 2008 alone, shattered the high hopes of many solar companies. That sheer fall, analysts say, will taper in 2010, with prices falling at a more manageable rate.
No one can deny that solar power is still very much reliant on government incentives. Spain’s incredibly fast rise in 2007 was wholly due to aggressive government incentives. The equally fast fall of Spain’s solar prestige in 2008 was a direct result of pulling those incentives too early. That being said, another reason that financial analysts are feeling enthusiastic is the apparent backing off from removing incentives by key solar-friendly governments like Germany. In Germany’s case, the government has announced that it will consult their solar industry before adjusting solar incentives (looks like the solar industry is starting to get some of the pull that the oil and gas industry has enjoyed for years).
Despite all the positivity and bold predictions, there is reason for caution, which even the most positive analysts are careful to point out. There is an eagerness to disseminate good news, but there also remains a good deal of uncertainty around financial markets, as well as insecurity about being too positive in lieu of the disastrous hubris that gripped so many investors in the recent past.
I do tend to agree with these enthusiastic stock analysts and green chippers. But my reasons for being positive about solar markets do not lie in financial analysis, as I am not economist, but in more general reasons, namely the rising consumer demand for green products and energy sources, as well as the very real need to adopt solar, wind, geothermal and other renewable resources. While we talk dollar signs and tech reports, the polar ice caps and their polar bears continue to waste away, Los Angeles retains its sickly green aura and mountaintops continue to be chopped down to provide easy access to coal. In summation, if it’s the power of financial positivity that gets investors and renewable energy going, that’s fine, just bring on those brighter days.
Sources: Reuters and Investopedia
Photo Credit: Vacation Care & USF unplugged
![[del.icio.us]](http://solar.calfinder.com/blog/wp-content/plugins/bookmarkify/delicious.png)
![[Digg]](http://solar.calfinder.com/blog/wp-content/plugins/bookmarkify/digg.png)
![[Facebook]](http://solar.calfinder.com/blog/wp-content/plugins/bookmarkify/facebook.png)
![[StumbleUpon]](http://solar.calfinder.com/blog/wp-content/plugins/bookmarkify/stumbleupon.png)
![[Twitter]](http://solar.calfinder.com/blog/wp-content/plugins/bookmarkify/twitter.png)
Posted on November 30th in Solar Funding by Dan.
November 30th, 2009 at 5:58 pm
In addition to incentives, there is also the issue of investing in R&D as well. The US has started down this road, but there is much more needed. The new ARPA-E program is a welcome relief from previous US policy. Innovation through R&D funding is what has made this country so great technologically; however, we have been lacking in funding for several decades and there is only so long that we can last on the innovations of our fathers and grandfathers.