The price of solar panels could fall by as much as 40 per cent by the end of the year as huge increases in polysilicon supplies lead to a sizable fall in production costs for solar panel manufacturers.
Industry analyst New Energy Finance reported that polysilicon prices hit a peak of $400 per kilogram last summer, but as investments to increase capacity have come online, prices have dipped to between $30 and $40 per kilogram and experts are agreed they are likely to carry on dropping.
“A massive increase in silicon supplies is coming through at the moment that will lead to a fall in solar module prices,” argues Angus McCrone, chief editor at New Energy Finance.
“In one way it’s bad news for solar companies because it will put pressure on margins as prices fall, but in another way it will trigger lots more demand from both large solar project developers and consumers as well as from businesses installing rooftop panels.”
The predictions come as a consortium of China-based solar firms called on the Chinese government to reduce the allowance it offers by 75 per cent. The companies believes that, with the industry benefiting from falling polysilicon and production costs, the government should cut the incentives it offers in an attempt to encourage officials to authorise more large-scale solar projects.
Meanwhile, China-based solar panel manufacturer Suntech Power Holdings announced a positive outlook for the year, estimating that demand from the US could reach 700MW during 2009 as a result of President Obama’s new stimulus package, and confirmed it was on target to start shipping thin film panels in the second half of the year.
The company’s confidence that demand throughout 2009 would continue to expand, was echoed by a group of other developers as Sun Well Solar announced it completed its first 40MW thin film solar cell production line ahead of schedule, and T-Solar confirmed it had begun volume production of what it claims is the world’s largest PV panels at its factory in Spain.