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Solar Panel Prices increase by 4% due to surging Asian Demand but is it sustainable

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Solar Price Rise – Fact or Fiction

The solar module prices, which were crashing continuously have shown a hike for the first time in the biggest European market, since the last four years. The main reason being cited is the equilibrium reached between demand and supply. I had to doubly check to re-confirm, that the module prices had finally increased.

Solar panel prices have fallen at a stunning pace over the past few years, as oversupply has made solar module ASPs remain below cost for even the best global solar panel companies like Trina Solar (TSL), Yingli (YGE), Renesola (SOL), Jinko Solar (JKS) and others. The prices of other components like solar wafers and polysilicon have also gone below cost leading to massive losses for leading companies like GCL Poly. The prices have fallen from around $4/watt in 2008 to 60c/watt now and have fallen by 40% in the last year alone. Many companies are already bankrupt and some are running in a zombie condition. Even the top companies like Yingli and Trina are showing massive hundreds of millions of dollars in losses. Solarworld and REC, which are the two biggest remaining European solar players are facing survival questions due to their debt burden.

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Reasons for the Rising Solar Module Prices in Europe

What is causing the solar module price rise:

a) Europe is set to impose large anti-dumping duties on solar panel imports from China and has already started registering solar module imports from customers. This has made Chinese companies wary of exporting to Europe which is leading to severe shortages. This has led to an increase in the solar panel prices in Europe.

b) Strong demand is being seen across China and Japan which are set to be the No.1 and 2 solar markets in 2013. The pricing in Japan is much higher than the rest of the world thanks to the generous Feed in Tariffs (FIT) set by the government there.

c) Supply is decreasing due to problems being faced by major suppliers – LDK and Suntech are in a bad shape with nobody knowing how these companies will fare in the future. Both have already defaulted on their bond payments but still their operations continue to run.

While the solar panel price increase is good news, I have my doubts whether it will prove to be sustainable given the massive overcapacity which still exists. China Sunenergy (CSUN) reported in its recent conference call that the industry oversupply problems still exists and it does not see an industry turnaround in the near future.

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.

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Sneha Shah

I am Sneha, the Editor-in-chief for the Blog. We would be glad to receive suggestions, inputs & comments on GWI from you guys to keep it going! You can contact me for consultancy/trade inquires by writing an email to

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