The global market for solar panels is forecast to reach US$ 71.8BN by 2017, primarily driven by robust demand for solar energy in the US and developing markets such as China and India, according to a new report by Global Industry Analysts Inc. The market will also be driven by government policies, especially feed-in tariffs and investment subsidies, which are expected to play a major role in determining the future demand for solar panels. Following several years of perpetual increase, growth in the solar photovoltaic (PV) cells and panels market slowed down for a brief period in 2009 due to the global economic downturn. The credit squeeze not only affected the purchases of solar cells and panels for energy generation, but also deferred investments in solar cell manufacturing. Sluggish demand resulted in a significant inventory buildup, starting from the silicon raw material and PV cells to complete PV systems, which ultimately led to a considerable decline in prices of solar cells and panels. The decline in demand for solar cells and panels was harsher in Europe, as the market suffered a twin blow with Spain registering drastic reductions in PV installations during the year. However, dramatic improvements in solar PV installations across the globe in the year 2010, particularly in Europe and Asia-Pacific ensured that the cells and panels market staged a comeback in 2010. Supportive government policies, especially feed-in tariffs and investment subsidies, helped western EU nations such as Germany, Italy and the UK, to achieve tremendous increase in solar PV installations in 2010, thus driving a resurgence in demand for solar panels during the year. After this major comeback, the solar panels market in the immediate future will be challenged by planned subsidy cuts in major EU countries such as Germany and Italy, as well as the possibility of excess supply. While Europe still accounts for an major share of demand for solar panels, other markets such as the US, Asia-Pacific and even Latin America, are expected to gather momentum, and even spearhead growth in the global market over the next few years.
