Global photovoltaic module prices decline

According to IHS's solar photovoltaic (PV) module price tracking report, PV module prices fell month-on-month in all regions of the world in September, with only the European Union appearing to be unaffected due to the appreciation of the euro against the US dollar.

In the Chinese market, the average price of solar modules in September was $0.592, which is the lowest price in the world; in the Japanese market, the average price was $0.843, which is the highest price level in the world. The average prices in other regions are between these two. The price in the US market is between the two, with an average price of $0.714 in September. The prices in these three regions in September were all lower than in August, as shown in the table.

PV module prices by region (in US dollars)

In contrast, the price of PV modules in the EU market remained at $0.645 in September, the same as in August. However, this apparent price stability is actually due to the exchange rate: it is entirely due to the appreciation of the euro against the US dollar by 2.2% during this period. In fact, if priced in euros, PV module prices in the EU region would also fall. The EU escaped the global trend of falling prices simply because it was priced in a weak US dollar.

Photovoltaic modules consist of interconnected solar cells sandwiched between glass or plastic panels, surrounded by frames, and then mounted on rooftops, etc. Any price adjustments in this basic market will affect price fluctuations in the retail market. There are many factors that can affect price changes, including: global supply and demand; suppliers reduce production; government actions in the market, such as providing incentives or feed-in tariffs, which affect demand.

Overall, polysilicon prices fell sharply in September, dragging down PV module prices. Due to sluggish module shipments, high channel inventory, and high inventories in the hands of manufacturers, many buyers only purchased the minimum amount of polysilicon under contract or purchased from the spot market to lower the overall cost of polysilicon.

Due to weak global demand and low capacity utilization in China's production centers, which led to additional price cuts, prices in the Chinese market are the lowest in the world. China continues to reduce shipments to the European market due to anti-dumping investigations. Due to the combined effect of various factors, module prices in the Chinese market fell by 3.9% from $0.616 in August. Analysis shows that Chinese prices may continue to fall, falling to $0.559 in the coming months. Compared with China, solar module prices in the US market fell by 1.8% month-on-month in September, while Japan fell by 4.5%, creating the largest decline among all regions.

The outlook for global PV installations remains bleak in the coming months, especially as the key EU market seems to be unable to see the year-end boom. Although installation activity in the Chinese market is expected to increase in the fourth quarter, China has always been a low-price market, so it will not necessarily boost overall module prices.

EU prices will not remain seemingly stable either. IHS predicts that due to weak demand, EU solar module prices are expected to fall by more than 7% by the end of the year, and the price stability brought by the weak US dollar in September will no longer exist.

Price declines are expected to be smaller in North America, Japan and other regions for the rest of the year. Nevertheless, weak demand will prompt sellers to compete on price, leading to further declines in the average global solar module price in the fourth quarter.