Solar After the 2008 Crash: Finding a New Normal

When the Spanish solar market hit its deadline in 2008, a global financial crisis was in full swing. The US subprime mortgage market collapsed in 2007, and the investment bank Lehman Brothers filed for bankruptcy on September 15, 2008. The financial crisis was widely blamed for the crash in solar module prices, but as far as I can tell had little to do with it — the prices of physical modules (as opposed to the stock prices of companies) fell simply because supply grew faster than demand, as new factories came online. Annual new build volumes continued to hit a new record every year, and annual investment figures hardly saw a dent; the problem was a fundamental oversupply of every part of the solar value chain. The financial crisis almost certainly had a role in the fall in solar stock prices which made it more difficult for solar manufacturing companies to sell more shares and raise more money, but that was a secondary effect as most were not in an expansion phase anyway.