A funny thing happened on the way to the bank…they aren’t lending anymore! Consumers are nervous about their jobs, so guess what that does to discretionary expenses..they disappear. Holidays, dinners out, everything that you don’t really NEED, goes out the window for a while, for middle class families, until such time as they feel secure again.
We have the perfect storm which hit the world markets and are still being felt across the globe. We have loose rules in the USA which created sub-par mortgages on homes not worth a fraction of what was being lent against them. And we have governments trying not to look panicky, although some presidential candidates were ready to throw in the towel and call off their campaigns just two weeks ago.
Luckily for all of us, this is not the 1930’s, where the reaction time was too slow to avoid a great global depression. Governments have reacted strongly, albeit a bit late, to the major issues facing banks and will fund us out of a recession. They permitted the banks to flood the markets with capital without regulations and now they are basically flooding the banks with money to back up those stupid decisions, once again in the hope that rising sentiment will become a self-fulfilling prophecy.
What does this mean for our industry? Well if we can continue to make the case for money saved, we win. If we use carbon savings (without accompanying credits), its a tougher case to make in today;s reality. People need to see real savings in their pocketbooks. Surely, incentives, subsidies and net metering will lead many to continue to covet solar systems, yet those on the edge, will now fall off, until such time as ROI calculations come down.
Expect falling prices in our industry to become the norm as oversupply hits us in 2009. I also expect that in the current turbulence of world markets, with capital being squeezed, you’ll see some smaller players bought up by bigger ones.
Hold on, its going to be a bumpy solar ride!
Sass