Milton Financials: Solar panel producers to feel the pinch in 2011.

Next year could see solar panel prices crash as supply is increasing while global demand is dropping – analysts.

Globally, solar panel manufacturers face a price crunch next year because they are adding manufacturing capacity at a time when global demand is poised to fall, Milton Financials sources report.

According to some market specialist the supply of photovoltaic panels may climb to almost triple the level of demand in 2011, flooding the market and potentially crashing the price.

“It could be Armageddon,” Gordon Johnson of Axiom Capital Management told Milton Financials sources in a recent interview. “Demand is about to fall at a time when you’re going to have a significant increase in supply. In a commoditized industry, that is a formula for disaster.”

Manufacturers have realized record sales for solar panels in 2010 as developers swarmed to connect them to the grid and benefit from subsidized power prices before the rates were slashed by governments in Germany, Italy and the Czech Republic. According to Johnson, in Germany, the globes largest solar panel market, demand is set to dramatically drop as the government cuts rates that producers earn by 13%, causing a major glut in the market, thereby driving the price that manufacturers charge down to as low as $1.10 per watt from previous highs of around $1.80 per watt this year, Milton Financials was advised.

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This release was published on openPR.