Price Summary
This month we have good news for solar electricity consumers and also for the solar industry.
The first area of excitement for PV end-customers is the rapid fall in solar module prices. The August 2009 survey set two records - the largest number of price declines in one month and for the magnitude of the monthly decline in both the US and European price indices.
There were 176 price declines this month. In the eight years of this survey, there has never been anything close to this number of moves in a single month. The previous high was 126 declines in May of this year. In past times when prices were rising, the largest number of price rises in a single month was 142, back in August 2005.
Retail prices have been declining since December 2008. Retail prices tend to lag movements at the factory gate (the price the module manufacturer sells at the first point of sale) by one to three months. Retail prices in this index are typically around 80% higher than factory gate prices, depending on the country/module model.
This record volume of declines resulted this month in a further 11 cent per watt reduction in the US index and 10 euro cents per watt in the European index. No monthly index movement of this scale has been observed before. These very large movements are highly significant, especially noting that most prices in the survey each month do not actually change. This month, individual price moves as large as $1/€ per watt contributed to the result.
The outcome is that solar electricity is accelerating as an attractive proposition for a growing range of end-users. This, in turn, will help contribute to filling the demand gap caused largely by the change of policy in Spain in 2008.
Now on to the good news for the solar industry and it relates to the demand side. Solarbuzz issued its annual downstream reports on the Asia/Pacific, European and United States PV markets in mid June. These reports revealed substantial order books (identified projects being contemplated, but not yet initiated) and positive PV policies in these regions with at least four countries displaying excellent prospects for newly turning in to 1GW+ annual demand markets.
The good news for the PV industry (and Solarbuzz, the industry's leading PV consultancy) is that since June we have received record orders (by some distance) for these reports. The purchasers are companies we would characterize as the "blue-chip" global and regional PV majors, whether they be manufacturers, system integrators or trading houses. These tenacious market (and "marketing") leaders give us confidence that this prospective demand, currently "on paper", will translate into real business.
Therefore, as fascinating as the price path has been so far in 2009, expect it to be just as interesting a ride in 2010 as the supply/demand mix adjusts once again to set the fundamentals for the forward solar module price path.
Lowest Prices ($/Wp)
The tracking of the lowest price band in the survey is measured against the number of prices below $4.75 per watt.
As of August 2009, there are currently 475 solar module prices below $4.75 per watt (€3.32 per watt) or 34.3% of the total survey. This compares with 420 prices below $4.75 per watt in July. The lowest retail price for a multi-crystalline silicon solar module is $2.48 per watt (€1.74 per watt) from a US retailer. The lowest retail price for a monocrystalline silicon module is $2.80 per watt (€1.96 per watt), from a US retailer.
Note, however, that "not all models are equal." In other words, brand, technical attributes and certifications do matter.
The lowest thin film module price is at $1.76 per watt (€1.23 per watt) from an Asian-based retailer. As a general rule, it is typical to expect thin film modules to be at a price discount to crystalline silicon (for like module powers). This thin film price is represented by a 130 watt module.
As allways, this is provided by our good friends at Solarbuzz.com
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