Another month has passed again without substantial stimulation of the European market. This can also be seen as far as prices are concerned.
While the module prices of Japanese or Chinese manufacturers stagnated in September once again, values across all regions of origin fell slowly, but constantly since the beginning of October. There was a disproportionate decline in the prices for German modules after several suppliers again decided on a clear downward price adjustment due to sluggish sales. This adjustment this year is earlier than usual. Apparently reticent demand has already caused fear of surplus inventories at the end of the year and so precautions are now being taken.
Whether or not the reduction, in particular in the case of high quality products, will result in general stimulation of sales is questionable nevertheless. The presence of cheap suppliers from the Far East who constantly devise new tricks with which to circumvent the import restrictions of the EU Commission – which have now been reduced to a shambles – has become too pronounced in the meantime. At the same time, however, there is growing interest in used equipment or products that have been devalued for other reasons. Missing warranties in the case of insolvency or used goods is frequently unimportant as confidence in the warranty assurances of still existing manufacturers is no longer very conspicuous anyway. Installers prefer to purchase a few extra modules and put them aside for future replacements rather than rely on empty promises.
The declining business in new installations is forcing many established systems integrators to either retreat or to rethink their business strategy. In an environment where manufacturers are creating their own Web shops and selling their products directly to installers there is no longer any room for multilevel sales. Module manufacturers do not shun doing business with small quantities or complete systems and some of them have even established their own lines of inverters. Thus it comes as no surprise when equipment and systems traders begin to abandon the distribution business and try their luck exclusively in the project planning business and in the Operations and Maintenance (O&M) segment.
However, the O&M segment is highly competitive. Companies that already have large parks under contract have a clear advantage over newcomers. Takeovers of entire companies or divisions are common practice, just to gain access to maintenance agreements. No one is willing to voluntarily sacrifice more or less lucrative agreements that may provide for solid and, in contrast to the trading business, predictable basic income. Recently large inverter manufacturers have begun to discover the market for themselves – like SMA Solar Technology AG, which recently took over the European O&M business of Phoenix Solar AG – an obvious step as the company is already involved in numerous projects through its service agreements. Consequently, it can also provide maintenance for other material. This is efficient and saves money for the operators.
Apart from monitoring, the added value in the case of service agreements consists in regular cleaning and maintenance, but also above all in repairing system failures due to damage (e.g. from hail, storms, fire, theft) or in the case of power losses (faulty system design, assembly or product errors). The demand for replacement modules and inverters constantly increases with the number and age of the installed systems. However, procurement of suitable replacement or substitute products is not always easy. Rapid technological development and the disappearance of many manufacturers have resulted in the fact that most original products are no longer available at ordinary stores. Installers and plant operators receive support in the search for suitable replacement products, among other things, from specialized trading platforms that offer new and used equipment with the most diverse specifications.
Through repair, optimization and maintenance of existing systems, solar companies help to maintain and increase the contribution made by the photovoltaic industry to the electricity mix as a whole and to confirm general confidence in the reliability of this technology. Of course jobs are also saved as a result because the market for existing PV installations will not become smaller in the foreseeable future, even if construction of new installations should remain in a state of decline.