With oil prices more than doubling from Dec-Feb lows, those who are lucky enough to enjoy the sunshine are turning to the sun as alternative energy, but lingering effects of the credit crisis might be discouraging consumers from turning to this still-costly alternative energy.
Latest statistics suggest that solar applications are up 15% in megawatts compared with last year, according to Bank of America Securities-Merrill Lynch report. However, installations are down by 68 percent.
The bank's analyst Steven Milunovich makes the following observation:
Although these figures imply a soft (and softening) solar market in California, it is likely that customers are deferring installation, both voluntarily and involuntarily. Commercial customers are waiting for financing to improve and for grants to become available, which began in August. Installers tell us that the demand is there, but that financing is holding up installations. We expect some improvement in the second half.
He also thinks that rising electricity rates makes the solar industry makes this too large a market to ignore for investors. Within the sector, solar technology firm SunPower has the leading share, about 30 percent share of completed systems, followed by Sharp and Suntech.