Upcoming Solar Shakeout?

3 Stocks That Can Survive the Solar Shakeout from US News & World Reports

Key Points:

• Citigroup analysts expect the industry to be 33 percent oversupplied in 2010 for Silicon (raw material used for Solar).
• Sharp is currently the largest solar producer.
• SunPower from China is expected to overtake Sharp.
• Many solar stocks are down this year.
• Survivors will be low cost leaders with scale.
  

My 2 Cents:

1. Solar costs are going to go down in 2010 because finally there is enough Silicon. The thought of the article is this will hurt Solar producers. My guess is it will help them by reducing their cost and helping lower the cost of solar panels made out of Silicon. The extra silicon may already be allocated with the huge growth rate of solar.
   
2. Scale in this industry is important for cost and when there is finally enough supply of solar panels, I see a shakeout. Currently many solar producers have orders booked far into the future (2009 and 2010). The question is when will there finally be enough supply?