Modules overcapacity forecasted, price reduction foreseen

In its latest solar market research report, Lux Research paints a gloomy picture of a looming overcapacity in photovoltaic module production as the demand for solar is impacted by caps on installations in Spain and the continued uncertainties of the market in the U.S. When coupled to slower than expected adoption levels in new emerging markets of France and Italy, the industry is heading for module over supply in the fourth quarter of 2008 of approximately 400MW, which will significantly increase in 2009 to 3.9GW.
The analysts further announce:

We expect module oversupply to occur early in 2009, and the resulting aggressive price reductions to trigger an industry shake-out.

Sorry for manufacturers, but the market look for over-the-counter modules below 2,8 -3,0 €/kW. At this price tag, PV plants in the small range, 5-to-10 kW, would be priced conveniently at around 5,5 €/kW, making it for a 8-9% return and a payback period below 9 years. This is the only way to trigger a market shake-down in Italy.