Solar panel industry experiences price declines

28th Jun 2012

The past 18 months has seen price falls across the solar power industry, with all elements of the supply chain affected by the declines.

From a consumer point of view, this can only be a good thing right? With manufacturers experiencing lower costs, these can be passed on to homeowners hoping to install the technology.

GTM Research warned that this may not be the case, suggesting that margin collapse across the supply chain could be putting the industry at risk – and that is far from a good thing.

The PV Technology, Production and Cost Outlook: 2012-2016 revealed that manufacturers have not been immune to the effects of the financial crisis, not least because solar power rebates have faced the chop.

GTM analyst Shyam Mehta expects that this could create yet more problems for the industry.

He commented: "The training wheels of subsidies are coming off, and the next few years will see the industry's first attempt to ride without support.

"Consequently, the next three years will be an extremely difficult period."

As tough as conditions are for the industry, consumers could well find they are paying less for solar energy systems than they were in the past.

The research claims that most manufacturers are seeing a price decline of around 70 to 80 cents per watt, with Chinese companies likely to be leading the fall.

Some firms have already faced difficulties, including those in the US and Europe.

GTM believes that solar power will gradually become more affordable and that companies will be forced to change their strategies in order to weather the financial storm.

The upshot is that with or without subsidies, solar power remains an affordable means of generating electricity and turbulence in the industry could well work to our advantage in the short term.

Posted by Mike Peacock

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