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TrendForce:Solar Downturn Spreads to BOS Sector

23 August 2012 Energy

According to EnergyTrend, the green energy research division of TrendForce, the demand in PV market remained sluggish. Outlook for September appears bleak, and the expected demand rebound may not occur. On the other hand, shrinking end-market subsidies has affected the return on investment (ROI) of solar systems. Manufacturers and makers have become less flexible when it comes to cost control and keeping ROI on a profitable level. Therefore, aside from the price adjustments of module, companies are now shifting their focus to cutting down the BOS (balance-of-system) price.

Given the fact that module prices have fallen to suppliers’ variable costs, prices will not see a further decline unless suppliers are willing to sell at a loss. As a result, suppliers started to urge BOS companies to accept higher prices. Furthermore, solar companies’ vertical integration has set foot into EPC and BOS sectors. Over the past few years major brand vendors have been striving to make inroads into the bidding project markets and have achieved certain level of success. Recently they have also invested in the mounting bracket market. According to EnergyTrend survey, due to intensifying competition, prices of solar inverter, mounting bracket and other EPC-related applications are starting to see fluctuations lately. Makers have provided more room for price negotiations in order to acquire market share. According to statistics, mounting bracket ASP dropped by 25%, while solar inverter ASP dipped 5%-10%.

Due to the concern about high inventory level, along with certain suppliers’ effort to digest inventories, solar module spot prices saw a sharp decline. On the other hand, on account of their better price-performance ratio, demand for non-standard silicon wafers remained strong. Polysilicon ASP fell by 0.4% to $20.475/kg. As silicon wafers are affected by the rise of non-standard products and the fact that some mid and small-scale manufacturers have stopped their production, multi-Si wafer ASP went down to $1.027/piece, a 1.15% decrease. In addition, suppliers’ effort to sell products with conversion efficiencies between 18% and 18.3% and the pressure from high-efficiency multi-Si wafers made mono-Si wafer ASP plunge to $1.358/piece, a 1.24% decrease. Solar cell ASP slid by 0.23% to $0.425/Watt, while module ASP took a steep dive to $0.704/Watt, a 4.22% decrease, due to certain manufacturers’ aggressive attitude.

As for contract prices, suppliers and manufacturers negotiate prices on a monthly basis. Polysilicon contract price dipped 6.82% to $26.296/kg. As for silicon wafers, most manufacturers turned to the spot market for their demand, which caused contract price to plunge further – multi-Si wafer contract price fell by 4.21% to $1.07/piece and mono-Si wafer contract price slid by 6.27% to $1.48/piece.


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