Falling prices have been one reason for this explosive growth. Chinese companies have entered the solar panel market and gained a market share of more than 50 percent.
Cheap Chinese manufacturing and massive governmental subsidies have more than halved prices for solar panels since 2008. Shi Zhengrong, CEO of one of China’s biggest solar panel manufacturers, Suntech Power Holdings, even massive state subsidies in many European countries like Germany, Italy, or Spain have created a huge market. European companies, once market leaders, are struggling, but consumers have happily bought into the price slump.
But growing competition and state subsidies aren’t the only driving forces behind the current solar boom. Technological advances are equally important. While most established European companies see their market shares melt away, America’s First Solar managed to nearly double its share in 2009.
The company’s secret: cheaper technology. First Solar’s thin cadmium telluride panels are less efficient than traditional silicon-based panels, but the Arizona based company has managed to produce them at significantly lower costs.