Solar Module Market Update

July, 22 2008

In light of the worsening solar panel shortage, before providing a deposit to or signing a contract with any solar dealer for the purchase of a solar system, it is now imperative that you confirm that the dealer that you are buying from has product in stock at the time of your purchase and is willing to tag the product in your name.

There are several recent events that warrant this degree of caution:

1. In light of the U.S. dollar's devaluation, many solar panel manufacturers have recently begun to pull out of the U.S. solar market and are instead shipping their products to Europe where they can fetch a much higher price with a stronger currency.

2. In recent weeks multiple attempts to extend the 30% Federal Investment Tax Credit have failed and the ITC will expire on December 31st 2008. This has caused a panic in the commercial solar industry with commercial installers rushing to acquire what remains of the U.S. solar panel inventory in an attempt to finish their large commercial installations before the tax credit expires. This has not only greatly diminished the supply of solar panels for residential installations but it has also impacted pricing.

3. In recent months hundreds of new, inexperienced dealers have entered the U.S. solar market. The vast majority of these dealers buy their products from wholesale distributors who in turn buy their products from manufacturers. In recent weeks many of the orders that were placed by these wholesale distributors have been canceled due to the demand in Europe leaving many dealers who are at the end of the distribution chain without product or with product that has greatly increased in price to fill their contractual obligations.

We strongly recommend against signing a contract and or providing a deposit with any dealer until you have visited the dealer's facility and have confirmed that the dealer has physical stock on hand. Another reason for caution when dealing with these in-home types of sales are the recent reports of several cases involving fraud where customers have provided deposits to in home sales people only to learn later that the company that these sales people represented never existed.