providing huge oversupply. See recent hard data below.
Monty
Solar PV cost per watt below $1 by Q1 2012
Henning Wicht, PhD, IHS iSuppli
June 17, 2011 -- Crystalline silicon (c-Si) solar photovoltaic (PV) modules
will costs less than $1 per watt by Q1 2012, projects IHS iSuppli research.
$1/W is the most broadly pursued goal of solar photovoltaics promoters. IHS
iSuppli believes the benchmark could give a boost to PV installations
globally and forestall a market downswing.
An accelerated, rapid decline in pricing came about after Intersolar Europe
this month in Germany. Going into Intersolar, spot prices from the top
Chinese brands, among the major players in the market, had been running at
$1.49 per watt for mainstream c-Si modules. By the time Intersolar closed,
prices had fallen to $1.30 per watt. IHS iSuppli states that this could have
happened because of the predicted flat or negative growth forecast for 2012.
Top-tier module brands lowered prices to gain market share in the face of
slowed growth or a market decline, explained Henning Wicht, senior director
and principal analyst, photovoltaics, at IHS. Solar wafers have experienced
price declines in 2011 as well: wafers were quoted in the $2.30 per-piece
range in June, down from $3.50 in March.
Figure. IHS iSuppli outlook for the cost of silicon + non-silicon content,
gross margins and prices from top-tier module players, covering the second
quarter for each year from 2011 to 2014.
While gross margins are projected to range between 10 and 12% this quarter,
intense competition will slash margins to 5-9% by Q2 2012, IHS iSuppli
research indicates. This margin pressure calls into question the vertically
integrated business model popular in the PV industry. Can a vertical
operation invest in wafers, cells and modules on the one hand, finance
downstream projects on the other, and also continue to run world-class
operations at each level?
Certain installations could drop to $2/W, said Mike Sheppard, analyst for
photovoltaics and financial services at IHS, which he predicts would be "an
important driver for stimulating demand," preventing a solar installations
dip in 2012.
Though many vertical operations will continue to thrive, the space likely
will find increased competition from another breed of player—the so-called
specialists that will be able to aggressively invest in just one area, and
more important, hold their own against their vertically integrated rivals.
Learn more on IHS iSuppli Photovoltaics Research here.
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