Industry analysts are predicting a massive bout of bankruptcies for hundreds of American solar firms as the market for solar panels, inflated by zealous government backing, begins to cool down.
The fallout could be dramatic, CNN reported Wednesday. “Of the few hundred or so solar panel makers worldwide, just 20 to 40 are expected to remain standing in a few years time, said Mark Bachman, a renewables analyst at Avian Securities.”
“A combination of slack demand and massive oversupply” is leading to rapidly declining prices for solar panels, CNN reports. The supply side of that equation, at least, has been exacerbated by a federal government that gives lavish incentives to startups looking to sell solar panels. Given that solar remains a more expensive alternative to fossil fuels, a lack of consumer demand is perhaps unsurprising.
But the impending bankruptcies of so many solar companies will almost assuredly ensnare companies backed by taxpayer financing. Solyndra was the most high profile federally-backed company to go under. Evergreen Solar also received support from the Energy Department.
Those two will not be the last to go under, analysts say. “Solyndra was just the beginning,” another industry expert said. “We’re going to see a lot of companies go bankrupt.”