Declining Module Prices

In Uncategorized by African Energy

A good friend asked whether he ought to stock in the face of declining module prices – were they not going to keep dropping and leave him stranded with high-priced modules?  News stories say that module prices will drop 40% by end of year – is it true?  Well, I don’t believe many news stories about solar.  Hardly anyone knows what they are talking about – a few months ago you could read that module production was going to double in 2009 (won’t happen).  This is a cyclical business and most participants in the industry today have joined on the latest up-cycle and don’t know what the downhill looks like!

Yes, module prices are dropping – I can see at least four drivers:

  1. the industry was badly oversupplied as lots of companies rushed into module manufacturing and assembly,
  2. the credit crunch slowed or stopped many grid-tie installations,
  3. some distributors and manufacturers are in trouble and some are exiting the business and dumping inventory at any price
  4. silicon manufacture has increased, meaning silicon is available and the price has dropped.

At some point pricing will hit a floor below which manufacturers can no longer produce.  I doubt this will be much below $3.00/w on the wholesale side for grid-tie modules and probably closer to $3.50/w on the off-grid side.  In the meantime, prices will probably drop erratically and then bounce back up.  We will do our best to serve you as they drop and to make sure we stock up when the bottom is reached, of course.  So, if you are importing by air, it is always best to let us be your warehouse and just bring in what you need for a month or so…

Lincoln