PV Crystalox Sees Benefits In Solar Price War
Date: 02-Nov-09
Country: UK
Author: Victoria Bryan
LONDON - Price pressure in the solar industry has helped to increase the market and boosted module orders in the second half of the year, according to the chief executive of Britain's PV Crystalox Solar.
"One of the side effects of pricing pressure is we're moving nearer and nearer to grid parity and at that point the market no longer needs incentives," Iain Dorrity told Reuters in an interview on Friday.
Average selling prices for solar systems have fallen by more than fifth in the major German and U.S. markets, as a result of oversupply and price pressure from Chinese producers, hurting earnings for many established solar players, such as Solarworld and Q-Cells.
PV Crystalox makes silicon wafers for major solar cell manufacturers such as SunTech Power and Sharp, and its wafers are mostly sold into the German and Japanese markets, which enjoy generous subsidies.
Dorrity said the German market in particular had seen orders surge in the second half of 2009 as customers rushed to take advantage of low module prices and feed-in tariffs ahead of an expected cut in the subsidy by the new German government.
"In Germany, it seems like everyone came back from their holidays at the end of August and ordered modules," he said.
The new German government has indicated it is more in favor of nuclear power than renewables in order to meet emissions targets but Dorrity said it seemed as though their stance was softening.
Falling crystalline silicon prices have also helped to close the gap between silicon-based panels and thin film panels, such as those made by First Solar, which this week posted third-quarter sales far below estimates.
Along with falling prices, the solar industry has suffered from an oversupply of panels and lack of financing for big projects.
Dorrity said credit finance was still slow but that there were suggestions that overhanging inventory was clearing.
"Cell and module makers now say they're operating at full capacity, which would suggest that any inventory's been burned up."
(Editing by Jon Loades-Carter)
