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Solar Supply Glut Could Push Module Prices As Low As $0.30/Watt

Originally published on RenewEconomy.
By Sophie Vorrath

The cost of solar PV modules is likely to fall dramatically in 2017, driven by a glut in the global manufacturing market that could deliver prices as low as $US0.30/Watt, according to a leading analyst at Bloomberg New Energy Finance.

rsz_solar-field-620x448_410_282_c1Speaking at this week’s Solar Power International conference in Las Vegas, BNEF’s head of Americas, Ethan Zindler, said the global solar module industry was headed for one of its worst supply gluts in history, and with no booming Chinese market to mop up the excess.

“We are on the verge of a new era of substantial overcapacity,” Zindler said on Tuesday – a situation fueled by a slowdown in China’s domestic solar market while many manufacturers continue to churn out panels.”

BNEF is not the only analyst to suggest big falls. Deutsche Bank is also expecting a fall to around 40c/watt from current levels above 50c/watt. BNEF expects the same, but says there is a risk that the price could fall even further, to 30c/watt.

That would be great news for the builders of solar plants, and for people putting solar on the roofs of their homes or businesses. It is less good for the health of manufacturers, although it could spark another round of manufacturing efficiencies. Some, though, may not survive.

As many would keenly recall, the last downturn wound up contributing to the bankruptcy of dozens of PV manufacturers around the world, including major players like Germany’s Q Cells and China’s Suntech, both later acquired by other companies.

And as ReCharge News notes, it was brought to an end when China’s own domestic solar market took off, sopping up most of the excess supply and delivering the world’s largest solar market by far, with China adding close to 20GW in the first half of 2016 alone.

But with no such “solar sponge” waiting in the wings this time around, the fallout could be much worse… for manufacturers, that is.

For PV installers and end users, however, the news is good, with cheaper modules likely to spur another wave of market growth around the world.

For Australia, as RenewEconomy observed last month, the combination of the international market glut and local policy incentives could result in one of our biggest ever booms in large-scale solar construction over the next year.

Locally, the situation in Australia is being enhanced by the continued high price of large-scale renewable energy certificates, the imminent results of a major solar tender by the Australian Renewable Energy Agency, and the growing appetite for solar investments by financiers and equity investors.

Reprinted with permission.

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