The global solar panel oversupply plaguing the industry over the past year may be set to ease, according to a report issued last week by industry research firm iSuppli Corporation. The report cites unexpectedly high demand for solar panels in Germany as the primary reason for the market shift. As a result of the Spanish solar bubble bursting in 2009, demand for solar panels fell, inventory piled up, and prices tumbled. And though the global market may still be in a state of oversupply, the worst of it may soon be over.

The number of solar panel installations has skyrocketed in Germany recently as the price of these products continues to plummet. This unexpected spike in sales has breathed new life into the ailing market, and has greatly helped ease the oversupply predicament that has plagued the sector in recent times. iSuppli reports than in 2009, the global supply of solar panels is likely to exceed demand by 65% or less, a decrease from forecasts of 92% just a few months back. iSuppli has accordingly adjusted its German market forecast, conjecturing that the country will install 2.5 gigawatts worth of solar panels in 2009.

The report concludes by speculating that the real impact of the German rebound will come in the year 2010 and beyond. Based on the massive oversupply in the early part of 2009, it appeared that the surplus would persist through 2010. However, due to Germany’s ambitious efforts in the face of falling prices, the overabundance may be at an end as early as next year.

View a previously written post by Mouli Cohen about Solar Power.