After weeks of stagnating prices, a slow, but constant decline in prices began in October, particularly for modules made in Germany and/or Europe, but also for products made in Japan and Korea.
Thus last month’s assessment indicating a lack of movement has to be corrected. Apparently there is still quite a bit of latitude for price reductions, precisely when it comes to previously higher priced products. Where the causes of these reductions are to be found and whether or not this trend will continue will be analyzed in the following.
The prices of German products in particular are rapidly moving in the direction of those of Chinese manufacturers – they showed an overall reduction of just under 4% within the month of October, and this trend is continuing. The price decline among Japanese and Korean brands was even greater. Up to now they had remained at a high level – now, however, the prices for these products have moved as much as 5.2% in the direction of the rest of the Asian competition.
The prices for silicon, ingots and wafers are currently at an all-time low. However, this is not merely a development of recent weeks – and thus is not suited as the sole explanation for the current situation. Instead the reasons can be found in an increasingly weak European market; the figures on additional installations send a clear message that cancels out quick sales of the respective commodities and inevitably results in inventory surpluses. Chinese manufacturers evidently underestimated local demand and/or have thus far been unable to build up sufficient sales pressure. Now they are forced to determine what to do with the import quantities granted to them on the European market in the weeks to come.
The strong decline in prices in the group of manufacturers from Japan and Korea is primarily due to the sudden appearance of a number of very inexpensive Korean modules. When it comes to forming average prices these ample and often large contingents – compared with the rather modest offers of Japanese origin on the spot market – have a very dominant impact.
In contrast, the development of prices among purely German products is currently shaped by warehouse clearances and sales of remaining stock. New insolvencies are being announced by German manufacturers and wholesale dealers almost on a weekly basis. For fear of being stuck with less attractive goods without any warranty claims, high depreciation allowances are accepted while the products of faltering manufacturers are jettisoned as quickly as possible. How quickly a once highly coveted product can lose its value on the market when a manufacturer gets into trouble is clearly demonstrated in the case of Suntech Power, the (formerly) premier Chinese solar company.
Any fear of missing the boat among installers and investors is a thing of the past. This time the end of the year spurt will presumably take place among manufacturers and wholesale dealers, so we can still expect to see several surprises on the module market in the weeks to come.
