Following several years of perpetual increase, growth in the Photovoltaics industry slowed for a brief period in 2009 on account of the global economic downturn, and the government ceiling on new Photovoltaic installations to 500 MWp in Spain, which represented the largest solar market in 2008. Sluggish demand resulted in a significant inventory build-up, starting from raw material silicon and PV cells to complete PV systems. Massive capacity, but limited utilization, plunged the prices of crystalline silicon solar cells, panels, and modules significantly in most of the markets. Price decline of solar cells and modules was also attributable to sharp decline in silicon price to as low as US$50 per kg. The falling prices, however, ushered in a period of cost-effective solar systems, bringing down the cost of entire PV systems.

The PV market rebounded quickly, backed by the economic upturn in developing countries of Asia, including China and India, industrial subsidy policies across most of the countries, and the expansionary monetary policy adopted by the central banks in 2009. The growing prominence of Asia in the sector is primarily attributed to the colossal solar cell production in China and Taiwan, which together accounted for about 49% of the global solar cell production in 2008. Going forwards, the global photovoltaics market is poised to exhibit robust growth, owing to the rapid adoption of solar energy across various regions.

Driven mostly by government initiatives and other incentives, the solar power industry is spurred by remote power generation, and growing on-grid applications. In addition, assistance in the form of grants and loans to fund novel technologies, would enable the industry to grow further. These factors, coupled with the declining prices of solar cells and solar modules backed by extensive innovation, R&D activities and political support, herald a promising future for solar energy. Developments are also on for the production of solar cells that are cheap and more efficient.
Government incentives, including subsidies and grants, are expected to remain the mainstay for future market growth. A look at the various regions delineates the growing support from governments across the world. In the US, the PV industry is supported through economic stimulus package, and Investment Tax Credits, which were renewed in 2008. Further, in 2009, the Obama government pledged substantial investments in the area of energy efficiency and renewable energy, through the American Recovery and Reinvestment Act of 2009. The Japanese government also restored the investment subsidy for rooftop PV installations in 2009, and further extended the program in 2010 with increased budget. This, coupled with a feed-in-tariff introduced during November 2009, provides opportunities for the solar industry in Japan. Besides, the recent years also witnessed the introduction of government subsidies in additional countries, including Canada, India, and China, contributing for the global volume growth.

source: sfgate