Solar Panel ArrayOne of the biggest, most depressing stories in the solar industry has been the oversupply of panels, which drove down prices and discouraged investors for most of 2009. Now, new research out of trade research firm iSuppli, suggests that demand will catch up with supply by the end of next year — good news for the growing number of solar panel and component makers.

One of the forces deflating demand was a rollback of solar subsidies in countries like Germany and Spain, which had formerly been quite generous with government support. But demand is rising in Germany despite the policy shift, doing its part to reduce the glut of panels.

Demand has risen mostly because the prices have plummeted. The iSuppli reports cite a jump in solar installations in Germany as the basis for its predictions. The group estimates that supply of panels exceeded demand by about 66 percent this past year. In August, the number was pegged at 92 percent.

This bodes well for panel makers like SunPower, Optisolar and their solar module suppliers like First Solar, Solyndra and German Q-Cells.

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