There is at least a risk of it, according to this article by Herb Greenberg, originally published in the Wall Street Journal over the weekend.

As you might expect, Greenberg's arguments are sensible enough;

i) just as in previous technology booms (hard drives, chip stocks etc.), at some point supply will exceed demand and prices will fall

ii) A large chunk of the solar market is in Germany and subsidy dependent - it is possible that one day these subsidies could be reduced or scrapped altogether

iii) either one or both of these could lead to a big fall out in the sector

Actually, I don't doubt that either of the first two will happen. The critical question is when and over what period of time?

There is actually no sign of Chancellor Angela Merkel's government scrapping solar subsidies at the moment and certainly won't be this side of a General Election, not due in Germany for another few years. As for supply exceeding demand and forcing prices down, we seem to be a long way from that too. If ever you want to keep a close tab on solar prices, then look at the solarbuzz indices - not much sign of downward price movement there.

As I've mentioned here before, the irony is that German subsidies help demand to exceed supply and keep prices up. If you were a solar manufacturer, why would you lower prices if you have a captive market in Germany, prepared through the help of subsidies to pay top dollar?

So I'm going to stick my neck out and say that barring a catastrophe (e.g. war between America and China over Taiwan), there will be no major fall in prices and no change in subsidies for the next 5 years. And my gut instinct is that Chinese solar companies will be a lot more competitive than their Western counterparts in the long-run too.