Amongst other things, 2012 will be remembered as a particularly difficult year for producers of crystalline silicon (c-Si) PV modules. Average sales prices declined at a fast pace during the year, despite frequent announcements from module suppliers that pricing was about to stabilise and then rebound.
Featured in the forthcoming NPD Solarbuzz Marketbuzz report, a full analysis of global weighted average solar pricing shows that module prices plunged by approximately 50 per cent on a year-on-year basis in 2012.
It was the fourth year in a row that c-Si PV module prices have declined and last year set a new record in terms of annual per cent decline.
Indeed, since hitting a pricing peak of above $4/watt in 2008, module prices have fallen by 80 per cent over the past four years; the compound annual rate over the past decade is approximately -15 per cent.
The decline in module prices has also lead to pressure on margins.
In 2012, even those manufacturers that were able to increase market share were still operating at negative margin levels due to intense price competition. This trend is also leading to a move by major manufacturers to enter the downstream of the PV industry in an effort to secure higher margins in project businesses.
Going forward, supply and demand rationalisation will be the key in determining the timeline and trajectory of price movements. Until that point, the goal for most companies will simply be to survive until a positive margin industry emerges again.
So far in 2013, there have been few if any real signs of change. Overcapacity still exists, as does the scope for oversupply. The PV industry is still comprised of a 30 GW end-market being supplied by a 45 GW upstream manufacturing engine. And as long as this imbalance exists, price stabilisation will be the first target for the upstream suppliers.
Figure 1: c-Si Y/Y Module ASP Percent Declines 2004-2012
Source: Adapted from NPD Solarbuzz Marketbuzz