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Solar Panel Prices in 2016 from now on depends mainly on Chinese demand trajectory

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Solar panel Prices

Solar panel prices have come under pressure in the last couple of months, with the revision in the feed in tariffs for solar projects in China. China has become the biggest demand source for solar panels accounting for 30% of the global demand. While other countries continue to be a stable market for solar panels, China has become the swing market. There has been no demand surge from other regions such as Japan or USA.

The ITC in USA has been extended for 5 years, implying there will be no rush to finish solar projects in USA in 2016. Japan is also slowing down its solar demand, as the country has installed a large amount of solar capacity and is in danger of meeting its 2030 capacity by 2020 alone. China faces a problem in terms of getting a good yield from solar projects, as many provinces do not have adequate transmission capacity to transmit power.  The returns from these projects can reduce, as power curtailment lead to lower power sales and lower revenues.

Solar Panel

Solar Panel

The lower FIT of around 13 cents also implies that the project developers are looking to lower equipment costs and putting pressure on solar panel makers to reduce quotes. These players are reluctant to do so because of their own wafer thin margins. But if this situation persists for long, then the solar panel players may not have any option but to lower their prices. Chinese panels cannot be exported to USA and Europe in large quantities because of duty and trade restrictions.

Solar panel prices globally are averaging around 50 cents/watt and have reduced by around 10% in the last one year. While prices are higher in USA and Europe because of duties, they are lower in the Asian region because of the absence of any trade restrictions. In India, the prices of solar panels are as low as 45 cents/watt because of severe competition and low solar end prices, which forces developers to buy panels at a low cost or not buy at all. GCL Poly which is one of the largest solar panel makers has already warned of low solar panel prices in the second half of 2016, due to overcapacity in key markets.

Read more about Solar Cell Price and Solar Panel Cost in India

Whether China can reach the target installation capacity of 18.1GWp it has set for PV power-generating stations established in 2016 depends on return on investment, which in turn hinges on PV module prices, according to industry sources.China’s feed-in tariff rates for 2016 are: CNY0.9 (US$0.137)/kWh for most of the northwestern region and some areas in the northern region; CNY0.95/kWh for the northeastern region, most of the northern, western and southwestern regions and some areas in the northwestern region; and CNY1.0/kWh for the other areas, the sources indicated. Based on current poly-Si PV module pricing, prices should be lowered by at least 5% to attract investment in setting up power stations in areas subject to feed-in tariff rates of CNY0.9/kWh and CNY0.95/kWh, the sources noted.



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

One Response so far | Have Your Say!

  1. solar panel

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