Market Analysis

Market Analysis August 2012 - High pricing pressure despite declining inventory levels and an increase in orders

Overall, prices for crystalline modules, which again dominated demand on our marketplace, fell for the month of June by 2.1 to 4.3% on average. Crystalline modules from China recorded the highest price decrease with a fall of 4.3%.

In Germany, it is now clear again at last what form the legal framework will take in the coming months. This comes following the resulting compromise in the mediation committee, and after both the Bundestag and Bundesrat approved the amendment made to the German Renewable Energy Act. Admittedly, very little was changed and, above all, the level of cuts remained the same; however, the inclusion of an additional remuneration category of 10 to 40 kWp should be viewed positively. Prices for the in-stock module types of several tier-1 manufacturers even increased slightly towards the end of June, which is due to the fact that projects had to be completed by the end of the month to qualify for the higher feed-in tariff.

Developments in the Eastern European markets in June were, above all, shaped by Romania and Bulgaria adapting legislation dealing with the promotion of PV systems. In Romania, the number of green certificates awarded by January 1, 2014, will still come to six. In Bulgaria, however, the feed-in tariffs were revised downwards significantly, by 50% in all tiers. “Above all, the decision in Bulgaria will continue to put pressure on system prices in this market. This is especially apparent in the increased demand for inverters made by Chinese manufacturers for systems with a capacity of at least 200 kW,” explains Georg Urban, pvXchange Area Sales Manager Eastern Europe.

In the USA, many Chinese manufacturers’ prices deviate from the global level due to the preliminary import duties on modules with Chinese cells. “Several Chinese manufacturers have even decided to keep away from the US market for the time being, which, combined with a lack of availability in modules that aren't subject to the import duty, is resulting in a decrease in supply,” according to Elliott Gansner, pvXchange General Manager North America.

However, supply is still greater than demand for modules both in the USA and in the rest of the world. As a result, we assume prices will continue to fall in the coming months despite an increase in orders and a decrease in global inventory levels.