Market Analysis

Market Analysis January 2012 - 2011 Sees Prices for solar modules drop by up to 45%

2011 Sees Prices for solar modules drop by up to 45%

The prices for solar modules continued to fall in December. As a result of efforts to completely clear or maintain their warehouse stocks at a low level before the new year, many dealers were prepared to offer considerable discounts. This was particularly noticeable in the case of modules from Tier 2 and Tier 3 manufacturers. Regarding demand, it was clear that, to a large extent, customer demand focused on only a few Tier 1 manufacturers, and that they were prepared to accept higher prices for these particular products. Following considerable stockpiling in the first half of the year, numerous dealers avoided a build-up of new stock towards the end of the year. Several of the module types from the manufacturers in greatest demand were thus either no longer available at all, or available only at increased prices. Consequently, price deterioration was slightly more moderate than expected.

In the short and medium term, however, in view of high production capacities, a further supply bottleneck is not to be expected. Sporadic bottlenecks for particular module types should be limited to exceptional cases—for example, the very short-notice subsidy cuts in the UK, or shortly before significant subsidy reductions, as in Germany in December 2011.

Considering the year as a whole, prices fell most significantly for crystalline modules from China. With a drop of 45 percent, a price level was reached that no one in the industry would have thought anywhere near possible at the start of the year. Driven by price cuts by Chinese manufacturers, remaining manufacturers were forced to follow suit, with the result that the price index fell by 32.5% to 45% in all categories.