Suntech to be biggest panel maker in '09-iSuppli

LOS ANGELES, Aug 10 (Reuters) - China's Suntech Power Holdings Co Ltd will overtake Germany's Q-Cells AG as the world's largest producer of solar panels this year, according to a report issued on Monday by industry research firm iSuppli.

Suntech, Japan's Sharp Corp, and China's Yingli Green Energy Holding Co Ltd and JA Solar Holdings Co Ltd are defending their market positions by continuing to increase production 'as if a recession had never occurred,' iSuppli analyst Henning Wicht said in a statement.

Meanwhile, producers including Q-Cells, U.S.-based SunPower Corp and Britain's BP Solar have cut output or expansion plans in response to a massive oversupply of solar panels and cells that is driving down prices.

'Those suppliers that have reduced or made adjustments to their production of cells and panels as a result of the softening demand have seen their short- and mid-term strategies falter,' the report said.

Nearly half of all solar panels made in 2009 will not be sold this year due to the solar supply glut, iSuppli said.

Total solar panel production will rise to 7.5 gigawatts (GW) this year, up 14.3 percent from last year, the report said. However, only 3.9 GW of solar installations will take place in 2009.

'This inventory glut will have a long-term impact on the solar business, with panels set to remain in a state of oversupply until 2012,' Wicht said.

The group blamed the supply glut on the decision by Spain, which accounted for half of all solar installations in 2008, to roll back government incentives for solar power.

iSuppli cut its solar panel production forecasts for 2009 through 2012. After that, Wicht said 'fast-growing demand for solar installations will be able to absorb global panel production and inventory.'

(Reporting by Nichola Groom; Editing by Steve Orlofsky)

(([e-mail]; [phone]; Reuters Messaging: [e-mail])) Keywords: SOLAR ISUPPLI/ (Visit the Reuters Environment blog at http://blogs.reuters.com/environment) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.