As large global supply of solar modules far exceeds demand, prices continue to fall. That’s a good thing to boost the long-term profitability of the solar industry, according to a recent report. However, not always for solar module companies.
Analysis done by Lux Research noted that module costs have dropped to $0.70/W in the past four years, while cost of goods sold (COGS) have not fallen at the same rate, thus creating huge losses for module builders.
Image credit: Solar panels via photonenergy/Flickr/Some Rights Reserved
However, the report projected that Cadmium telluride (CdTe) modules would remain the least expensive option in the market for years to come, with prices reaching as low as $0.48/W by 2017.
Meanwhile, COGS all around is projected between 2012 through 2017, as copper indium gallium (di) selende thin-film modules decline to $0.64/W, a 14 cent price difference from today’s costs.
Lux Research also said there will be a bigger boost in efficiency in module production in the next few years:
“Efficiencies are the key driver. Manufacturing location has the greatest potential influence on COGS but overcapacity makes opening new facilities in low-cost countries unlikely. Consequently, increasing module efficiencies will make the most difference, up to $0.09/W for mc-Si and $0.21/W for CIGS.”
Lux Research Associate and author of the report Module Cost Structure Update: Path to Profitability Ed Cahill also said it’s vital for manufacturers to cut their own costs in order to strengthen their profit margins and ability to survive.
““With pressure from competitors, customers, and policy-makers to drop prices even further, manufacturers need to drive costs down to survive and thrive during the coming years of growth in the demand market,” he said.
Source: Lux Research
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