After a period of growth and optimism, the solar industry may be in for some difficult times according to an article yesterday in the New York Times. After 2,000 jobs cuts in a U.S. solar company that had recently been growing strongly, there certainty seems like there is reason to be concerned.

In fact, five months ago, this company, First Solar based out of Arizona, celebrated the production of its millionth solar module and doubling its production in Germany. Now it will stop all production in Germany, the country that holds the world’s largest market for solar power due to large government subsidies.

The news of this setback may be worrying other U.S. solar companies such as Solaire, a San Diego solar company.  In Germany, government subsidies, which were once very high, are now being lowered to a point where they have weakened demand. First Solar, as a result, decided to halt production there saying that they will return a $30 million grant given by the government, and spend approximately $55 million on severance payments on workers. Instead this U.S. company will begin to focus on growing business in other areas of the world.

Sunpower, another US based solar company, just announced that it will begin production in the Philippines. Whether or not solar energy San Diego will follow suit is not known, but given the need for alternative energy sources in the world it may be in the near future.