... but at the moment all we are seeing in Europe is higher temperatures. The current weather in Central Europe, with its humid, stormy heat in the north-east and damp, cold air in the south and south-west, is not exactly the ideal recipe for brisk activity in the PV industry. To the contrary, following a hectic first quarter, a kind of inertia seems to have taken hold of the market. Project planners and installers are reorienting themselves, assessing what the market will bear and feeling out prices. Projects are being developed at a leisurely pace and handled one step at a time. The result is that there are more goods on the market again, which means that some suppliers will have trouble following through with price increases they have already announced. Module prices are dipping downward again as manufacturers and dealers seek to avoid higher inventories at all costs with the end of the first half approaching. Project-based discounts are therefore negotiable these days.
Major trade fairs, such as Intersolar Europe in Munich in May and SNEC China in Shanghai at the beginning of June, provided insights into current technological developments as well as forecasts for the direction of the market going forward. In the meantime, there is an increasing number of voices announcing impending module bottlenecks and claiming that a veritable run on inexpensive modules is in the offing. We are hearing that in the third quarter the supply of multicrystalline modules, in particular, will be snapped up and that it would wise to get them now while the getting is good. Some of the tier-1 manufacturers are using this rationale to justify their overall pricing policy; that is maintenance of previous price levels with an eye to gradual increases of 1 to 2 cents. At the same time, however, significant volumes of low-cost modules continue to appear on the European market with prices not significantly below, but by no means above, the levels of recent months.
In other words, nobody really seems to be paying heed to the forecasts made at the trade fairs. So, what is the basis of the forecasts?
With regard to China, many analysts are again expecting new capacity in the 30 to 40-gigawatt range to come on line over the course of this year. However, the first half has been relatively restrained, with new installations of less than 10 gigawatts to date. This was because of the wait for important policy decisions and new feed-in tariffs. Many projects which had already been planned were temporarily put on hold. The upshot was that a large proportion of the cells and modules produced in China were exported to other regions of the world where prices stagnated or even fell. Now, however, the new tariffs and programs have been announced and the machinery is running again. The Chinese government is giving grid parity projects priority over tenders and is unlikely to launch any new projects in the Top Runner program in which mainly high-efficiency monocrystalline modules were installed.
In the second half of the year, many PV projects with cheaper multicrystalline modules will probably be built in China. If the overall forecasts for new installations can be believed, at least 20 to 25 gigawatts of these modules will still be needed this year in China alone. When one also considers the fact that many manufacturers have already reduced their production capacities for multicrystalline cells and modules and that they supposedly only have a small amount of room to counteract the situation, a bottleneck is inevitable. Multicrystalline modules are unlikely to find their way to Europe and those that do will only be available at unattractive prices. So much for the theory propagated on all sides by the manufacturers. The hope is that this situation will encourage customers to plan ahead and order the module volumes they need for the months ahead.
The claim is that those who lock in a contract now will receive their goods punctually and reliably at the today's prices. But unfortunately, the past has too often taught us otherwise. When things really got tight, many module manufacturers no longer felt bound by their previous commitments; instead inventing all manner of excuses as to why they could either not deliver or only do so less favorable conditions. Actually, we who bore the brunt of these practices thought that they were finally a thing of the past. Yet, I have the sneaking suspicion that there are more unpleasant surprises in store for us. I will therefore refrain from making a clear recommendation in favor of longer-term supply contracts.
Buyers should decide for themselves whether they believe the forecasts and trust the assurances of the suppliers.
One approach can never go wrong, however: stay flexible and have a plan B in your pocket. There is always more than one way to complete a project. It may be that highly efficient, even bifacial, modules are not such a bad alternative to the cheaper multicrystalline panels offering significantly lower output by area. The increased capacity of PERC cells and modules, as well as continuous developments in uni- and bifacial products towards ever higher outputs, means that the price difference between these products and good multicrystalline panels is no longer so high, especially for the performance classes just below those of the top modules. Another indication of this is that the price curves for high-efficiency and mainstream modules in the price index are steadily converging. Considering the lower space requirements and therefore lower consumption of materials, as well as the shorter installation time, the higher-priced modules may not be so much more expensive after all.
Overview of the price points by technology in June 2019 including the changes over the previous month (as of June 18, 2019):
