Module price index
April 2013: PV market reacting calmer than expected to EU anti-dumping investigation
- Graphic: Solarpraxis AG/Harald Schütt
In Europe, the price increase for photovoltaic modules is not quite as strong as expected, at least until now. In particular, thin film module prices remained relatively stable, with March showing barely any movement. For crystalline modules from Japan, there was even a moderate price decline, while prices for European and Chinese modules increased slightly in this class.
The new EU regulation introduced on March 5, under which all imports of Chinese solar panels have to be registered, initially caused considerable disquiet among all market participants in Europe. The sudden onset of high demand for modules already on stock in the EU led to upwards adjusted prices, but only in the first few days. Meanwhile, solar module prices have stabilized again and even slightly decreased, so they only increased by 1 to 2%, compared to the previous month.
What are the reasons for the quick recovery from the initial shock within the industry? It is as simple as this: necessity is the mother of invention. In addition, due to the frequent ups and downs in recent years, the PV industry is somewhat hard-nosed. Flexible solutions for every situation and loopholes are found quite quickly. After the remaining stock was sold, new goods were imported from China. The associated risk is not assumed by the manufacturers , which regularly offer untaxed goods (under Incoterms rules CIF, FOB or EXW), nor the local dealers or installers.
Author: Martin Schachinger, pvXchange GmbH
Read the full entry in the May edition of pv magazine, due out on May 3.
March 2013: EU Directive on anti-dumping tariffs throws market into a jitter
- Graphic: Solarpraxis AG/Harald Schütt
The turnaround in PV module prices that was showing last month has been confirmed. It has been accelerated by what has proven to be an unpredictable and unpleasant development for the market.
In the first week of March, the wording of an EU Directive dating from 01.03.2013 was published, according to which all imports of Chinese solar modules must be registered by the customs authorities.
The implementation of such registrations has caused jitters among European buyers. Since the amount of the punitive tariff duties is not assessable yet, no final sales price (calculation basis for all sorts of PV systems) can currently be shown. At the moment, this makes financing nearly impossible. Manufacturers from China relocate this risk by transferring the import of the modules to the buyer.
Accordingly the run on goods currently stored in the EU has been huge. During the first days after the details of the directive became known, the demand for, as well as the price of the modules, increased by as much as 10%. These stocks of Chinese goods are, however, set to drastically decline over the weeks to come. Many dealers are now buying for stock again.
What opportunities do Chinese manufacturers have for defusing this situation? The directive (if it is similar to the law applicable in the United States since 2012) concerns solar modules with crystalline wafers and cells from China. As far as possible, the affected manufacturers could equip their products with cells from Taiwan, which would result in a price increase of a few cents. Many Chinese manufacturers are already seeking out production capacity in Europe. This would lead to a price increase for end products "Made in Europe" by at least 10 Cent/Wp.
Author: Martin Schachinger, pvXchange GmbH
Read the full entry in the April edition of pv magazine, due out on April 4.
Feb 2013: Trend reversal for PV module prices is observable
- Graphic: Solarpraxis AG/Harald Schütt
The end of photovoltaic module price declines, which became apparent within the last few months, was confirmed by recent investigations. While the average price level was still slightly decreasing at the start of 2013, compared to December 2012, a trend reversal was already visible at the end of January.
Production overcapacities are still influencing the market along the entire value chain, but stock clearances have largely been successful. It is to be expected that in February, for the first time in 24 months, module prices are not going to be lower than in the previous month. On the contrary, a minor increase is in sight, especially in higher performance classes. This particularly relates to products with crystalline cells, as well as to thin film technologies.
Immediate availability is only guaranteed for less popular module types with lower efficiency at the moment. The continuing run on higher efficiency classes with reduced production capacities inescapably leads to longer delivery periods up to several weeks. Manufacturers and suppliers take advantage of this situation and are revising their prices upward.
Another reason for the over demand is the strong Japanese market where, in particular, Japanese manufacturers are able to sell their products at – from their point of view – very attractive prices.
These products are currently missing in other markets or are at least just available at small amounts. Also the further rise in demand in China is showing an effect, in spite of the unattractive margins. The strong project business of Chinese manufacturers is leading to a shortage of popular brands and performance classes, though this might only be a temporary trend.
Author: Martin Schachinger, pvXchange GmbH
Read the full entry in the March edition of pv magazine, due out on March 1.
Jan 2013: No change expected
- Graphic: Solarpraxis AG/Harald Schütt
The PV industry witnessed more price declines for silicon modules and thin film technologies in December. The main reason for this is likely to be efforts of both suppliers and wholesalers to reduce stocks at the end of the year. Especially manufacturers from China are trying to reduce their general stocks in European harbors and warehouses, due to the threat of an anti-dumping tariff in Europe, which is still under discussion in Brussels and could result in heavy write-offs for stocks. High panel stocks in the U.S. hurt the balance sheets of Chinese manufacturers last year, when a tariff was introduced and led to painful write-offs.
As December is traditionally a low season for PV installations in Germany and the rest of Europe, and as there have been hardly any reasons for a rush to gain old feed-in tariffs, there have been order rebates of up to 5% for special volumes.
For January 2013, we do not expect a heavy change in current prices. Production capacities worldwide will have been reduced in general and also due to New Year holidays and the approaching Chinese New Year, thus bringing volumes much more in accordance with actual demand.
Author: Martin Schachinger, sologico AG
Read the full entry in the February edition of pv magazine, due out on February 11.
Nov - Dec 2012: Prices are still falling – but what will 2013 bring?
- Graphic: Solarpraxis AG/Harald Schütt
Solar module prices kept on falling from November to December. The main reason might be the effort of distributors to keep their stocks as small as possible at the end of the year.
2012 has been a turbulent year for the solar industry in general, characterized by a continuous, rapid price decline. Within the last 12 months, the prices for crystalline modules from China decreased the most (-34%), but there has been a significant drop in prices in all categories, ranging between 25% and 34%.
There are many reasons for this situation: Early in 2012 overcapacity among manufacturers of crystalline cells and modules, as well as among leading inverter manufacturers led to stocks that could not even be significantly reduced by short-term peaks in demand. Bound liquidity, lower sales volumes, higher costs and incredibly low margins increased the pressure on all producers equally.
What developments will take place in 2013 regarding the photovoltaic industry? The variety of manufacturers and products is expected to shrink further as the consolidation phase is far from complete. However, a few of the well-known brands we have heard very little of lately because of the many insolvencies last year could become more pronounced again with the help of new, mostly Asian investors.
The dispute over import and trade restrictions on Chinese modules will keep the industry on tenterhooks for a few months, but is probably not able to change much regarding the desolate situation of many European and North American manufacturers. Chinese companies have already brought themselves in a good position through acquisitions in the relevant markets.
Author: Martin Schachinger, sologico AG
Read the full entry in the January edition of pv magazine, due out on January 8.
October 2012: In search of new markets
- Graphic: Solarpraxis AG/Harald Schütt
Chinese factory gate prices: Chinese tier-1 and tier-2 module suppliers are working hard to keep prices stable.
During October module prices declined further. Crystalline silicon (c-Si) module prices in Europe declined by 1.9%. Shipments into Europe benefited from the euro exchange rate (euro vs. U.S. dollars exchange rate applied in the IHS Solar October Price Tracker: 1.2903), however demand for solar modules in the region was weak. Module shipments to China improved in volume but prices were not attractive. Many Chinese c-Si module suppliers try to diversify sales by penetrating into emerging markets such as Latin America and the Middle East.
Supply and demand
In Europe’s key markets, less modules in demand in October compared to September. After high installation efforts in September, PV installations were down in Germany in October. In middle-sized European PV markets such as in Greece and Bulgaria, retroactive measurements on existing PV installations were considered by regulators, thus negatively affecting investment plans in these countries.
As expected, the Chinese and Japanese markets remained strong in October with many installations on-going in the month. Low incentives, rather complex procedures and lack of financing hinder installations in the Indian market.
The factory utilization of Chinese tier-1 and tier-2 module suppliers improved in the 2nd half of October, thanks to the strong domestic market. However, most of the tier-3 Chinese module suppliers were still struggling for orders.
Current prices and price outlook
Module prices declined and are declining across all regions except Canada. Prices in Japan also remain high with an average price of US$0.822/W. Sales in China are on the low end at US$0.578/W on average. Chinese c-Si modules sold in U.S. declined by 3.5% down to US$0.689/Wp in October.
Compared to the previous month, the average price of Chinese tier-1 suppliers in October declined by 1%, while the tier-2 suppliers’ average price showed no change. However, the prices of three Chinese suppliers declined by 4.9% during the same period.
Prices are expected to decline during the period of November 2012 through January 2013. Chinese c-Si modules sold in Europe are expected to decline only by 1.1% in November. Prices of shipments to China will drop faster. A price decline of 3% to about 5% is expected in the next three months across all regions.
Authors: Henning Wicht, Glenn Gu, IHS
Read the full entry in the December edition of pv magazine, due out on December 6 and online on December 11.