The solar energy industry generated $37.1 billion in revenues and installed 5.95 gigawatts worth of systems worldwide in 2008, said research firm Solarbuzz Monday.

Generous government subsidies in countries such as Germany and Spain have made installing and operating solar energy systems attractive businesses. In fact, the government program in Spain was so appealing that the country overtook Germany as the largest market in 2008, according to the new Solarbuzz report, which looks at companies that makes various materials and components for producing solar panels.

The 5.95 gigawatts that were installed represented a 110 percent hike from 2007. The global solar industry also raised more than $12.5 billion in equity and loans, an 11 percent increase from 2007, said the San Francisco-based Solarbuzz. Meanwhile, solar cell production worldwide reached 6.85 gigawatts in 2008, nearly doubling the 3.44 gigawatts in 2007.

Other market research firms have recently issued reports looking at 2008 and providing forecast for the next few years. A GTM Research report pegged the overall 2008 installations at about 4.51 gigawatts worldwide, a nearly 70 percent jump from 2.66 gigawatts in 2007. Displaybank's research showed that the global installations grew to 5.5 gigawatts in 2008 from 2.4 gigawatts in 2007.

Europe remains the world's largest market, accounting for 82 percent of the demand, Solarbuzz said. The United States is the third largest market (360 megawatts) in 2008, following Spain (2.46 gigawatts) and Germany (1.86 gigawatts). South Korea ranked No. 4 (280 megawatts), making it the largest market in Asia. 

The ranking of the top four markets echoed the findings by Displaybank, whose report said Spain installed 2.28 gigawatts, Germany 1.53 gigawatts, the United States 333 megawatts and South Korea 274 megawatts in 2008  (see Report: Korea's Solar Industry on the Rise).

Displaybank said Japan ranked No. 5, followed by Italy. Solarbuzz said Italy was a larger market than Japan in 2008.

GTM Research also saw Spain making the most gains in solar-panel installations in 2008. The country's feed-in tariff program, in which the government sets high rates for solar electricity and requires utilities to buy all the solar power available on the market, boosted Spain's installations by 258 percent to reach 1.7 gigawatts last year. 

Germany installed nearly 1.54 gigawatts while the United States installed 313 megawatts last year, according to GTM Research. Japan came in fourth at 235 megawatts, followed by Italy at 175 megawatts and South Korea at 95 megawatts. 

The amount of solar power installed in Spain has been hotly disputed, given the problems the country faced in carrying out its feed-in program. A rush to take advantage of the feed-in tariffs last year spurred allegations of fraud. A government investigation has been launched to see if some developers claimed to have installed the systems and connected them to the grid by a deadline when they didn't (see Solar Fraud Could Eliminate Spanish Market). 

The enthusiasm for the Spanish market also led to an oversupply of solar panels – they weren't installed in time before Spain's newer and less lucrative solar electricity rates took effect for 2009 (see Solar a Bust in Spain and Spain Kicks Off New solar Feed-In Tariffs).

It also has taken the Spanish government some time to tally the amount of legitimate solar energy installations in 2008. In January, the government reported more than 3 gigawatts for 2008, though market analysts had expected the number to be adjusted downward (see Spain Installed More than 3GW of Solar in 2008).

Join industry leaders and influencers at Surviving the Shakeout: Greentech Media’s 2009 Solar Industry Summit in Phoenix, Ariz., April 14–15.