A new report from IHS iSuppli, the “PV Cell and Module Market Tracker”, forecasts that the wild pricing drops in solar photovoltaics may be stabilizing starting in the second half of 2012. At the same time the tracker projects that the balance between supply and demand will come closer to leveling out reaching more of an equilibrium by 2015.

The report found that the price declines will moderate later this year largely on the strength of renewed demand. While prices will still fall but only by about 11 percent over the scond half, as opposed to the 12 percent drop in prices in the first half of the year. That’s also much less than the 20 percent price drop in the industry saw in the second half of 2011. The report forecasts that average market pricing for PV modules will reach €0.57 per watt, down from €0.64 at the end of June, by the end of 2012. “We’re seeing capacity scaling down and emand is remaining flat this year, but growing in 2014. We’ll see demand and supply intersect in a better way,” said IHS iSuppli Analyst Mike Sheppard.

Still, the solar manufacturers will have to weather an environment where supply has exceeded demand for an extended period of time, which has led to the failure of numerous photovoltaic manufacturers like Solyndra, Abound Solar and GE’s decision to at least delay the buildout of its manufacturing plant in Colorado. “I think there are going to be more to fail,” said Sheppard. “All the second or third tier PV manufacturers in China are closing up.…I expect more of the pure-play cell guys to go away,” he said.

However, Sheppard doesn’t expect remaining U.S. PV manufacturers to experience more failures. “In the U.S. I don’t see as many companies folding, up if they have the pipelines built. They just have to get the costs down,” he said. “They should really hone in and look internally.” Sheppard thinks U.S. manufacturers could look to First Solar as an example of how to get costs down.