Chinese Solar Module Prices Drop Below Dollar-Per-Watt Mark

Posted by SI Staff on February 17, 2012 No Comments
Categories : New & Noteworthy

The average price of Chinese tier-two crystalline PV modules fell to $0.96/W in January, according to the latest PV module pricing report from IMS Research. However, annualized price declines (ignoring seasonality) slowed to 22% in January, having exceeded 50% in December, as incentive levels were reduced in a number of major PV markets at the end of 2011.Â

Highly competitive pricing from Chinese tier-two manufacturers has continued into 2012, and the average crystalline PV module price from these suppliers declined twice as quickly as the total market in January, dropping to $0.96/W.Â

Although many spot prices were offered below this in recent months, this is the first time that the global average price had fallen below this industry milestone, IMS Research notes. Prices as low as $0.80/W were recorded for Chinese tier-two module suppliers in January, typically for large orders from German distributors.

The report also found that significant pricing variations exist throughout the supply chain, with distributors seeing an even faster fall in prices than others.

‘Having enjoyed less price pressure than manufacturers in December ahead of [feed-in-tariff (FIT)] cuts in major markets, distributors' prices were found to have declined faster than manufacturers' prices in January,’ says Jessica Jin, report author and research analyst at IMS Research. ‘However, the average distributor price for Chinese tier-two crystalline prices still remained 25 percent higher than manufacturer pricing.’

Although January saw module prices decline once again to new record lows, declines actually slowed in comparison to previous months in response to strong demand in Europe.

‘Following the political response to Germany installing 7.5 GW in 2011, significantly more than the government's annual target, it is considered highly likely that major amendments or cuts will be made to the FIT in the world's largest market in the first half of 2012,’ Jin notes. ‘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.’

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