Blog
Solar panel OVER PRODUCTION causes decline in pricing.

Incremental RISE in solar prices 2014

Hello everyone, Sun Source Solar Brokers here with recent data published by important manufacturers for the first quarter express an incremental rise in the price of solar panels over the last several years.

This increase in prices is undoubtedly good news for both the manufacturers and investors, who have been hemorrhaging losses after several companies have declared bankruptcy.   This does not mean, however, that supporters of the industry, along with environmentalists, will desire that this prices maintain, considering that the rise in prices is detrimental to their wish to increase demand for solar, which remains higher priced than traditional energy sources.

The price of solar modules has suffered from over production and over capacity, as well as a decrease in available subsidies for renewable energy.  Prices are now on the rise, the manufacturers have denoted, due to the turbulence in the industry that has taken care of the overproduction and over capacity, bringing supply and demand more closely aligned.

After a trade issue with the Chinese, Europe has set a minimum on the price of importation, and this has also been a factor in the price rise, as the demand grows in Japan.   “The average price of each unit has gone up and remains very high amongst the top Chinese companies”, says Hanwha SolarOne in their first quarter report, which is one of the most prominent manufacturers.

In the report, the company denoted a 4.4% rise in prices in the first quarter, reaching $0.69 per watt.
The average price of modules sold by the top tier Chinese manufacturers was between $0.62 and $0.68 per watt, the report also lists.

Sunrise

After a lot of turbulence, prices have stabilized. They decreased by almost 50% in 2012, but this decrease has been reversed completely this year.  Along with Hanwha SolarOne, many other manufacturers of solar modules have shown prices going up in the first quarter of 2014.  “The uptick of total revenues over a multiple year period has largely been a function of more shipments, higher prices, and more revenues from electricity.”, says Jinko Solar in their first quarter report.

Another manufacturer, Canadian Solar, denoted an increase in their first quarter as well.
Chairman of Canadian Solar Shawn Qu says “An increase in demand in crucial places and an overall global increase in demand are expected in 2014.”  “It’s expected for other markets, like Japan, Canada, the US, and China, will continue to grow and maintain revenue throughout 2014. China is likely to be the largest solar market in the world, with 11 GW to 12 GW of installations in 2014, and possibly reaching their goal of 14 GW.”

Another of the major Chinese manufacturers, Trina Solar, showed an improvement in the selling price of their modules, and had a profitable first quarter in relation to their 2013 first quarter.
“The increase year by year was largely in accord with the uptick in ASP and the fall of per-watt costs.”
Competitiveness

The primary catalyst for the rise in prices was the shakeup that occurred due to the over-capacity, as the smaller and less competitive manufacturers and companies went bankrupt.

Another factor, pointed out by a major producer, Yingli Solar, was the trade agreement between Europe and China which set minimum importation rules, stifling complaints of an unfair advantage from European manufacturers.
Yingli says in its presentation of yearly results “ASP’s went up by 25% in the fourth quarter in Europe compared to the first quarter of 2013 due to the selling of all the volume above the set price of minimum importation”.
One downside to all of this is how the rise in prices will affect the viability of solar power on the whole, which is already losing out on subsidies as national governments seek to bring down energy prices after the recent financial downturn.

Because of this trend, solar power must find a way to be competitive with fossil fuels, without the help from subsidies, by 2020.   Confidence remains high amidst module manufacturers that lower prices over the long term can be achieved with revenue due to savings and economies of scale.  “The number of producers of PV will continuously decline in the future because of an increase in the supply of these products, which will subsequently bring down the cost of manufacturing and developing new technology,” says Hanwha Solar One in its report.
Still the numbers from multiple manufacturers show that savings are not significantly rising, which goes to show that the solar industry may have difficulty in keeping their product competitive and keeping costs down.

 

Article written by Jennifer Coleman of Sun Source Solar Energy Brokers, providing solar brokering, brokerage, and solar energy consulting services in Santa Rosa, Marin, Sonoma, Napa, Solano and San Francisco Counties. For more information, please visit www.SunSourceSolarBroker.com

 

Comments are closed on this post.

Contact Info

Sun Source Solar Brokers
525 East Cotati Avenue, #220
Cotati, California 94931
707-888-7046

Affiliates