Market Analysis

Market Analysis May 2012 - Moderate price downturn

As in March, there was only a moderate price downturn in the values of our price index for April. Once again, crystalline modules made up the highest proportion of the activity. Due to the ongoing low availability of modules from Chinese Tier 1 manufacturers on the spot market, the proportion of Tier 2 manufacturers in the category “crystalline China” increased again, continuing a trend seen in March. In contrast, there was very little demand for thin-film modules.

Three years after the first appearance of our price index, the average values in all categories have now fallen below the € 1.00 / Wp mark. However, depending on order volumes, manufacturers, and module efficiency, isolated prices of less than € 0.90 / Wp are already being registered in the categories “crystalline Germany” and “crystalline Japan”. Regarding crystalline modules, the most significant price drop of 4.1% was again observed in the category “crystalline China”. The price drop for Chinese Tier 2 manufacturers was even greater than for Tier 1 manufacturers. In some cases, prices of less than € 0.60 / Wp in this category were possible for larger order volumes.

In the thin-film module categories, the largest drop--4.2%--was observed in the value for “thin-film a-Si/µ-Si”. This is likely due to the larger proportion of Taiwanese and Chinese manufacturers than the changes in price themselves. After the relatively strong downturn in February and March, April saw no change in the category “thin-film CdS/CdTe” and demand remained very low. Demand was also low for modules in the “thin-film a-Si” category and, after a March without significant changes in price, the April value has fallen by only 1.8%.

As expected, the German PV market settled down after the passing of the REA amendment and the introduction of an appropriate transitional period until the end of June or the end of September. Operators in the distribution channels placed increasing numbers of orders with manufacturers and, with demand concentrated less intensely on immediately available warehouse stock, delivery times of several weeks were again acceptable on the buyers’ side. Due to the many projects already planned and completed, and for which applications for connection to the grid had been submitted before February 24, market demand remains constant. At the same time, the transitional period is giving buyers sufficient time to improve their module procurement planning and to take shipments scheduled for delivery to European ports into consideration. In most cases, this enables distributors to sell incoming products from Asia before they actually land, a situation that led to very low warehouse stocks in April. It is not expected that warehouse stocks in the distribution channels will increase significantly until at least the end of June. As a consequence of this, we expect that the price downturn will also remain moderate in May.