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Poor PV market drags BOS firms

Posted: 27 Aug 2012 ?? ?Print Version ?Bookmark and Share

Keywords:balance-of-system? PV market? EPC-related applications? Polysilicon ASP?

According to EnergyTrend, the demand in PV market is still on the decline and may persist until September. On the other hand, shrinking end-market subsidies has affected the return on investment (ROI) of solar systems. Makers have become less flexible when it comes to cost control and keeping ROI on a profitable level. As such, companies are now shifting their focus to cutting down the BOS (balance-of-system) price, added the green energy research unit of TrendForce.

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, 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 percent, while solar inverter ASP dipped 5-10 percent.

Due to the concern about high inventory level, along with certain suppliers' effort to digest inventories, solar module spot prices saw a sharp drop. 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 percent 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, multiSi wafer ASP went down to $1.027/piece, a 1.15 percent decrease. In addition, suppliers' effort to sell products with conversion efficiencies between 18 percent and 18.3 percent and the pressure from high-efficiency multiSi wafers made mono-Si wafer ASP plunge to $1.358/piece, a 1.24 percent decrease. Solar cell ASP slid by 0.23 percent to $0.425/W, while module ASP took a steep dive to $0.704/W, a 4.22 percent 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 percent to $26.296/kg. As for silicon wafers, most manufacturers turned to the spot market for their demand, which caused contract price to plunge furthermultiSi wafer contract price fell by 4.21 percent to $1.07/piece and mono-Si wafer contract price slid by 6.27 percent to $1.48/piece.

 PV Spot Price

Figure 1: PV Spot Price Chart
Source: EnergyTrend, Aug 2012.

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