Market Analysis June 2012 - Improved availability for crystalline modules

In May, the values on our price index fell only slightly against the previous month’s figures. Demand on our platform continues to be concentrated more intensely on crystalline modules, which saw a 2% to 3% fall in prices in May. Overall demand was very low, with thin-film modules in the “thin-film a-Si/µ-Si” category experiencing the strongest activity.

Bucking the trend of recent months, the proportion of Tier 1 manufacturers in the category “crystalline China” rose again in May. At the same time, during this month, sporadic slight increases in price were observed for the modules of several Tier 1 manufacturers. However, this situation changed in the last week of May, with prices falling slightly for all Tier 1 manufacturers. In conjunction with the consistently lower prices for modules from Tier 2 manufacturers, this led to a price drop of 2.8% in our “crystalline China” category. As in the previous months, prices below € 0.60 / Wp were observed for larger order volumes.

This month, the most significant drop in the prices for crystalline modules was observed in the category “crystalline Germany”. The value in this category fell by 3% against the previous month to € 0.96 / Wp. In exceptional cases, prices fell to slightly less than € 0.70 / Wp, reflecting the liquidation of modules by manufacturers currently filing for insolvency. However, these exceptions had no significant effect on the overall statistics for May. As in April, prices in our category “crystalline Japan” showed the lowest drop of 2%. For the first time, this category matched the value of “crystalline Germany”, which was added to the index in January 2011 and replaced the category “crystalline Europe”.

Regarding thin-film modules, the extremely low demand in the categories “thin-film CdS/CdTe” and “thin-film a-Si” continued into May. The values here fell only very slightly or not at all. Activity was slightly higher only in the category “thin-film a-Si/µ-Si”. With 4.4% in this category, this was the most significant price drop observed on our price barometer.

On May 11, the German Federal Assembly voted against the REA amendment (Renewable Energies Act) passed by parliament with a two-thirds majority, and called for a mediation committee to reduce the severity of cuts. This once again led to a situation in which planning certainty for new projects is no longer a given. We do not expect any significant effects from this in June; due to the projects that receive the old compensation in accordance with the planned REA amendment alone, a significant increase in installed pv capacity is expected. However, if no consensus is reached by the summer break, and the amendment cannot be passed by the last session of the assembly on July 6, the earliest chance to modify the act will be at the end of September. This would have effects reaching at least into the month of October, and would lead to severe market caution on new installations. In this scenario, we would expect greater pressure on prices as a consequence of excess production capacities, and a more significant price downturn in Q3.