News - Solar Prices rise for the first time in 4 years !!
Reflecting a major shift in the global solar market after four years of severe erosion, prices for solar modules in the key Europe market are rising due to number of factors, including the newly restored balance between supply and demand.
The ASP for China-based crystalline silicon (c-Si) solar modules shipped to the European Union (EU) increased by 4% in March, the first monthly rise since January 2009, according to the IHS. Prices are set to rise by another 1% in April and by an average of 4% during the next three months.
"For years, solar module manufacturers have contended with profit-killing market conditions characterized by oversupply and rapidly falling prices," said Glenn Gu, senior analyst at IHS. "Now, with clear signs that the balance between supply and demand is correcting, prices have stopped their decline and have begun to rise. This is mostly good news, because sales are increasing from Asia, causing worldwide demand to catch up with supply. On the other hand, prices also are rising because of anti-dumping legislation in the EU, which is negatively impacting sales for China-based suppliers."
Europe is the world's largest solar market, accounting for 57% of global installations in 2012.
The rise in worldwide demand is arising from booming sales in China and Japan. Both countries at present are soaking up massive volumes of modules, helping boost worldwide pricing.
Japan commands a particularly high module ASP, which is pulling up pricing in Europe and worldwide.
Meanwhile in China, the government is expected to reduce its feed-in-tariff (FIT), which serves to stimulate solar installations and drive the sales of modules. The China incentive is spurring faster adoption of solar systems while the FIT terms are still attractive.
The upward price pressure is expected to continue, although the rate of increase is slowing in April compared to March as the rising price starts to dampen demand.
However, looking further ahead into May and June, China-based module prices in the EU are expected to climb rapidly, driving up overall average module prices globally.
With many China-based module suppliers cutting back shipments or withdrawing from the market ahead of the preliminary EU solar anti-dumping decision to be announced in early June, the module shortage in Europe is expected to intensify.
Average China-based module prices by the end of May are expected to rise from 5-6% compared to March, reaching US$0.691/watt or EUR0.53/watt.