Will PV Price and Margin Problems Bring Down the Industry?

The latest survey conducted by EnergyTrend, the green energy industry research division of TrendForce, indicates that while spot prices for polysilicon and Si wafer have remained at $50/kg and $2/piece, the polysilicon and Si wafer manufacturers have been experiencing price pressure from downstream makers. In fact, TrendForce indicates that downstream manufacturers’ spot price targets for September 2011 are under $50/kg for polysilicon wafer and lower than $2/piece for multi-Si wafer.Source: EnergyTrend, Taiwan.

pv graph Will PV Price and Margin Problems Bring Down the Industry?

Based on TrendForce’s survey, downstream PV makers remain conservative toward the market outlook for PV demand, creating a price pressure for polysilicon manufacturers. However, the polysilicon manufacturers have not reacted with any major quotation changes, and the lowest spot price remained at $50/kg. As a result, this week’s polysilicon average trading price slightly declined by 0.8 percent to $51.1/kg.

On the other hand, Si wafer prices have shown different trends: mono-Si wafer price has increased by 0.65 percent to $2.62/piece. As for the multi-Si wafer prices, currently Si wafer makers have also experienced a significant price pressure; although top tier manufacturers’ price quotation remained at $2/piece, second-tier manufacturers’ price has dropped to $1.95/piece, with the average price of multi-Si wafer decreasing by 0.5 percent to $1.997/piece.

In terms of solar cell and module, TrendForce indicated that even though PV market demand has recovered partially, the market supply still exceeds its demand. While the worldwide production capacity for solar cell and module remains greater than the market demand and Chinese manufacturers continue to expand their capacity, oversupply of solar cell and module persists. On the other hand, as strong demand for high conversion efficiency product persists, the price quotations for related products have remained unchanged.

Consequently, solar cell and module prices were only slightly adjusted this week. TrendForce indicates that the average price for solar cell has slightly dropped by 0.27 percent to $0.749/Watt while the average price of PV module has slightly declined by 0.9 percent to $1.217/Watt. Moreover, due to a consistent decline in crystalline-silicon PV module, the average price of thin film has declined by 1.34 percent to $0.957/Watt.

In addition, TrendForce continues to monitor the potential meltdown of the US solar industry. After REC and Q-Cells’ announcement for closing their production lines, TrendForce anticipates a rapid profit margin decline will increase the management pressure for both American and European manufacturers. If the market price does not recover significantly to improve PV maker’s profit margin, American and European manufacturers with weak business performances may not survive this wave of global solar industry changes.