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Solar panel prices finally rebound

By Lou Kilzer
Thursday, Nov. 14, 2013, 11:47 p.m.
 

Solar panel prices are increasing worldwide for the first time in a decade and should continue to rise in 2014, says a report by a solar energy research firm.

Boston-based GTM Research reports immense oversupply in Chinese solar panel production has slowed because companies there cut back or went under. There is “a general focus on suppliers on margins over sales growth,” which is producing an uptick in prices, GTM said.

The firm forecasts a 9 percent increase in photovoltaic prices next year.

“If you look at the prices for 2013 they are already going up,” GTM analyst Jade Jones told the Tribune-Review. Whether the price trend will continue beyond 2014 is uncertain because of factors such as import taxes, she said.

The Department of Energy reported last year that the cost of installed residential and commercial solar panel systems in the United States declined an average 5 to 7 percent from 1998 to 2011, accelerating by as much as 14 percent from 2010-2011, depending on the size of the system.

Preliminary data show the price collapse continued in 2012, when most analysts were predicting “price trends will maintain their downward trajectory in the near term,” the research firm said.

ThinkProgress, a progressive website, and other energy analysts considered diving prices to be good news, believing that would quicken the adoption of solar as a clean energy. But some scientists warn a steady decline in the price of solar cells, the fundamental component of solar systems, was being stretched, the Trib reported last month.

Norwegian doctorate researcher Schalk Cloete said a technology breakthrough is needed for continued price declines to happen because prices for traditional silicon-based cells have fallen to the point where they became commodities.

Further declines, Cloete and others said, could come only through reduced quality controls, drops in unrelated materials or lower labor costs for installation of the systems.

Manufacturers “couldn't make enough profit off current margins,” Jones agreed.

For years, American and European solar manufacturers accused China of dumping below-cost solar products on the West to earn market share. This caused the United States to impose tariffs on Chinese manufacturers in 2012; the European Union did so this year. Though some Chinese companies tried to sidestep the measures by offshoring some production, they continued to hemorrhage cash and Chinese banks became less forgiving.

Suntech Power Holdings, a Chinese solar maker once the world's largest solar company, put its major subsidiary into bankruptcy this year. Other large Chinese solar firms — Yingli Green Energy Ltd, LDK Solar Co., and Trina Solar Ltd. — reported significant losses.

New Chinese leaders are putting emphasis on cleaning the air in smog-choked cities, making solar a possible alternative to coal in a country that had made solar predominantly an export item.

Jones said demand for solar is growing significantly in Japan, which could be pushing prices upward. Although there has been a huge disparity between supply and demand, “we are beginning to see that narrow,” she said. “There is a little more balance.”

Higher prices might mean higher profits down the road for solar cell manufacturers but reduced margins for solar panel installers, she said.

Crashing prices before this year hurt American manufacturers — including Solyndra, the California firm that went bankrupt in 2011 despite accepting a $535 million loan guarantee from the Department of Energy.

A Trib investigation found that President Obama showcased Solyndra as a success in his energy policy, even though auditors warned the firm's financial future was in jeopardy.

Lou Kilzer is a Trib Total Media staff writer. Contact him at 412-380-5628 or lkilzer@tribweb.com.

 

 
 


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