NewEnergyNews More: SOLAR PRICE WARS

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  • Sunday, July 24, 2011

    SOLAR PRICE WARS

    Gross Profit Feels the Pinch in PV Price War
    20 July 2011 (IMS Research)

    "A period of highly competitive pricing from PV module suppliers has led to gross margins declining by over 25% in the last six months, according to the latest analysis from IMS Research. Suppliers have been forced to engage in a tough price war, but have not been able to reduce their costs as quickly as their prices; their margins have been the victim.

    "…[S]uppliers have reduced prices by around 15% in the last six weeks in order to compete in an industry that is currently plagued by oversupply. Average crystalline PV module prices had been close to $1.80/W in the first quarter of 2011; however, a sudden change in market dynamics has resulted in sharp price declines, and the same modules are now being consistently priced below $1.40/W."


    click to enlarge

    "Rapid reductions in the price of cells and wafers have helped to offset PV module price declines and ease the impact on suppliers’ margins…[P]olysilicon spot prices have fallen by over 30% since the end of 2010…[but] polysilicon prices stubbornly remaining above $50/kg have limited the ability of downstream suppliers’ to reduce their costs…

    "A rebound in demand is predicted in the second half of 2011, which will help suppliers’ profits to recover. IMS Research predicts that total PV module supplier gross profit will grow once again in Q3 and Q4’11…"

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