Has the solar-power industry lapsed into a classic cycle of boom and bust after a decade of unprecedented growth? It might appear so. As years of government subsidies boosted the global installed capacity of solar-photovoltaic (PV) modules and dramatically cut prices, new producers, including China, rushed into the market, prompting oversupply and pressure on margins that threaten many pioneering players. Demand today isn’t keeping up with supply, and governments continue to scale back support as they cope with the aftermath of the economic crisis.
Despite the challenges, new McKinsey research indicates that the industry is suffering from growing pains rather than undergoing death throes.
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