"Highly competitive" pricing from Tier 2 Chinese PV module manufacturers16. February 2012 | Industry & Suppliers, Markets & Trends, Products | By: Becky Stuart
IMS Research has found that while annualized photovoltaic module price declines have slowed, Chinese Tier 2 manufacturers are implementing "highly competitive" pricing strategies.
In the company's latest PV module pricing report, it was found that overall, annualized module price declines, "ignoring seasonality", slowed to 22 percent in January, down from 50 percent in December. Despite the fact January saw prices decline to "record lows", says IMS Research, the drop did in fact slow compared to previous months, due to strong European demand.
"Following the political response to Germany installing 7.5 GW in 2011 … it is considered highly likely that major amendments or cuts will be made to the FIT … in the first half of 2012. The threat of these changes, combined with the attractive returns offered by the current system prices in Germany, is driving demand to remain unusually high in the first few months of the year," says research analyst and report author, Jessica Jin.
However, IMS Research says that the Tier 2 Chinese manufacturers are continuing to push prices down, with average prices for crystalline photovoltaic modules falling to US$0.96 per watt (/W) in January. "The average crystalline PV module price from these suppliers declined twice as quickly as the total market in January dropping to $0.96/W," it says in a statement released.
The company goes on to say that while many spot prices have been below this, this is the first time the global average price has fallen below this figure. "Prices as low as $0.80/W (around €0.60/W) were recorded for Chinese Tier-2 module suppliers in January, typically for large orders from German distributors," it continues.
In comparison, Sam Wilkinson, senior market analyst for photovoltaics, tells pv magazine that Western suppliers’ average crystalline module pricing was more than 30 percent higher in the same time period. He adds that Tier 1 Chinese suppliers’ prices remained just above the $1/W mark.
IMS Research also found "significant" pricing variations within the module supply chain. Jin says that distributors’ prices fell faster that manufacturers’ in January. "However, the average distributor price for Chinese Tier-2 crystalline prices still remained 25 percent higher than manufacturer pricing."
Across the board
According to pvXchange’s Goekhan Demirci, while overall prices in January fell below those of December’s, there was a "slight upward trend" in the second half of the month, particularly for modules from Chinese Tier 1 manufacturers. He says that steady price declines for thin film modules continued, however.
He writes, "In view of the current photovoltaic demand situation and the still murky political backdrop, prices – for crystalline modules at least – are unlikely to give up any significant ground in February and March. A slight increase might even be in the cards, something the price barometer for crystalline modules has not seen since December 2010."
pvXchange reports the following average crystalline prices as of February 7:
- Germany – just under €1.10/W; $1.43/W
- Japan/Korea – €1.05/W; $1.36/W
- China/Taiwan – under €0.80/W; $1.04/W
Average thin film prices are around:
- Cadmium telluride – just under €0.70/W
- Silicon tandem – €0.75/W
- Amorphous silicon - €0.60/W
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