Solar Module Price Erosion Slows - SolarStar

In a bit of good news for the battered solar industry, price declines for photovoltaic modules  are expected to moderate slightly in the second half of 2012 on the strength of renewed demand, according to the latest IHSiSuppli Photovoltaics Cell & Module Production Market Tracker report “PV Cells and Modules—No Further Significant Price drops in 2012” from information and analytics provider IHS.

The rise in demand for Taiwanese cell makers is one reason for the stabilisation of PV cell  prices. Earlier in the year, punitive tariffs of 30% to 250% were imposed on Chinese modules sold in the US, compelling Chinese manufacturers to look increasingly to external sources, such as Taiwan and South Korea, to obtain solar cells.

Nevertheless, the price reductions for modules will flow only partially through the solar supply chain. Vertically integrated module manufacturers will benefit from cheaper polysilicon, but pure play module makers should not count on any strong declines in cell prices.

Global installations of PV solar systems in 2012 are expected to reach 30.2 gigawatts (GW), up 9% from 27.8GW in 2011, according to the IHS iSuppli PV Service. In the best-case scenario, installations of 36GW are possible, representing 30% growth.

Robust demand amounting to 7.3GW worth of new installations is expected in Germany this year. Although German installations in 2012 will be down 3% from 2011, the decrease is a much smaller setback than many had feared. This comparably strong performance is expected despite the reduction of the government Feed-in Tariff (FiT) that had incentivised the growth of the German PV market in recent years.

“Recent developments indicate that the German PV market is weaning itself from subsidies more quickly than many had expected,” de Haan said. “Supermarket chains in the country have begun to invest in PV systems with the clear goal of generating electricity for self-consumption. In some of these projects, the cost savings from solar energy are already replacing the FiT as the justification for investment in PV systems.”