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Solar Industry Falls Into Shadow in 2011
CNBC.com | November 11, 2011 | 04:27 PM EST

Investors in the solar industry have needed a strong stomach this year, and that’s unlikely to change soon.

Falling prices fo

r solar panels amid slackening demand in Europe and a faltering global economy helped to push three U.S. companies into bankruptcy, including Solyndra , the solar panel maker that received $535 million in federal loan guarantees .

The Market Vector Solar Energy exchange-traded fund, as of mid-October, was down some 58 percent compared with a 3 percent drop for the Standard & Poor’s 500.

For now, analysts expect solar will continue to struggle, and that several more firms in the U.S. and Europe could disappear.

That survival-of-the-fittest period should end by the second quarter of 2012, however, analysts expect the solar industry can turn around and eventually thrive as new markets in China , the U.S. as well as elsewhere in Asia, Southeast Asia and the Middle East begin to grow, and as solar becomes less reliant on government subsidies.

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