2011 PV prices continue to fall


In its new quarterly report on the photovoltaics (PV) polysilicon and wafer market, IMS Research says prices will, on average, fall by seven percent in the first quarter of 2011, and will continue to decline in the second quarter. The primary reason cited is incentive scheme cuts, which have impacted on installation growth.

In comparison, average polysilicon contract prices reportedly fell by just two percent in the fourth quarter of last year. Spot prices, on the other hand, were said to have declined by nearly 10 percent, thus "reversing the rapid increases that had occurred in the previous quarter, when Tier 2 and 3 suppliers had been able to sell silicon at inflated prices on the spot market, due to high demand and a shortage in supply".

Looking forward, IMS says both contract and spot prices are predicted to continue falling in the first quarter of this year, while similar price declines are forecast throughout the supply chain. In a statement, the company comments: "Reduced incentive rates have placed increased pressure on module suppliers’ prices, these manufacturers are naturally transferring this pressure to their upstream suppliers and forcing down cell, wafer and polysilicon prices as a result."

Weakened demand

Explaining its reasons why the smaller suppliers will be affected, IMS continues: "High demand throughout 2010 meant that their larger competitors were largely sold out, and these suppliers were able to capitalize on the situation and increase their shipments and prices quickly. In particular, a large number of Chinese Tier 2 suppliers were able to gain market share and in fact, in Q3’10, Chinese Tier 2 module prices were on average higher than Chinese Tier 1 prices. As demand weakened at the end of 2010, Tier 1 suppliers’ products have become more freely available (…)."

Consequently, it believes the smaller companies will have to become more price competitive, if they want to gain market share this year. What’s more, it states that Chinese Tier 2 crystalline module prices are forecast to fall by nearly 10 percent in the first quarter.

Meanwhile, IMS says suppliers’ costs are not declining as rapidly. PV market research analyst, Sam Wilkinson comments: "Efficiency improvements and relatively high utilization rates are helping to continue the lowering of manufacturing costs throughout the supply chain. However, costs are not being reduced as quickly as prices, and gross margins are beginning suppliers’ costs to tighten. IMS Research predicts that by mid-2011, some polysilicon and wafer suppliers will see their gross margins fall to half of what they peaked at in Q3’10."

Popular content

This content is protected by copyright and may not be reused. If you want to cooperate with us and would like to reuse some of our content, please contact: editors@pv-magazine.com.


Related content

Elsewhere on pv magazine...

Leave a Reply

Please be mindful of our community standards.

Your email address will not be published. Required fields are marked *

By submitting this form you agree to pv magazine using your data for the purposes of publishing your comment.

Your personal data will only be disclosed or otherwise transmitted to third parties for the purposes of spam filtering or if this is necessary for technical maintenance of the website. Any other transfer to third parties will not take place unless this is justified on the basis of applicable data protection regulations or if pv magazine is legally obliged to do so.

You may revoke this consent at any time with effect for the future, in which case your personal data will be deleted immediately. Otherwise, your data will be deleted if pv magazine has processed your request or the purpose of data storage is fulfilled.

Further information on data privacy can be found in our Data Protection Policy.