Crystalline PV module profits drop to single digits
June 26, 2012 // Paul Buckley
Market analyst, IMS Research is reporting that average gross profits of crystalline photovoltaic (PV) industry module manufacturers dropped to nine US cents per watt in the first quarter of 2012.
The fall is forecast to put pressure on suppliers according to the latest quarterly report from IMS Research.
As a result of continued price pressure and highly competitive market conditions throughout the PV industry, gross profits are forecast to continue to fall further to just seven cents per watt by the end of 2012.
IMS Research reveals that following a year of rapid price declines, when average crystalline PV module prices fell by nearly 50 percent, industry gross profits fell below $500 million in Q1’12, the lowest level since 2008 and more than 75 percent lower year-on-year. The cause of this rapid deterioration is simply due to costs not falling as quickly as prices. Whilst average crystalline PV module prices fell by 67 cents per watt in 2011, average costs per watt reduced by just 42 cents.
“Profit margins have been the victim as suppliers have been forced to engage in a fierce price war and have reduced prices faster than they have been able to reduce their costs,” commented IMS Research’s Senior Market Analyst Sam Wilkinson. “High inventory levels, weak demand and reduced government support for PV have all contributed to a rapid downward spiral for PV module prices.”
The narrowing gap between prices and costs has resulted in the average gross profit per watt of crystalline modules falling from 39 US cents to just nine cents in one year. One key reason that suppliers have been unable to reduce their costs quickly enough is that average polysilicon prices have not declined as quickly as module prices.
“Although spot prices for polysilicon have quickly fallen over the last year, a large proportion of polysilicon is purchased under long-term agreements, and it has taken some time for suppliers to cancel or renegotiate supply contracts in order to reflect these reductions in spot prices. If we consider this mix of spot and contract prices, on average polysilicon prices fell far less than modules in 2011,” added Wilkinson.
Gross margins are forecast to stabilize at nine percent on average in the second half of 2012, with further price declines offset by significant improvements in non-silicon processing costs and continued declines in blended silicon purchase prices, which are projected to reach $25/kg in Q3’12.
Visit IMS Research at www.imsresearch.com
Steep growth for thermoelectric energy harvesting, says Infinergia Consulting
July 22, 2014
In a new report titled “Sub-watt thermoelectric energy harvesting: industry and market analysis”, market research firm Infinergia ...
AMS, Dialog merger talks fail
MIT wrist-robot adds extra fingers
Monolithic Power Systems signs with Avnet Memec
Thoughts on energy harvesting for wearable equipment
Will laser ignition replace the venerable spark plug?
July 21, 2014
Lowering fuel consumption and reduce the emission of pollutants - these aspects today are at the top of the design goals ...
Merger creates powerhouse in micro imaging software
'Hot carrier' study opens solar cell efficiency advances
Google Glass' killer app: surveillance
- Testing GPS with a Simulator
- DSM presents: Select the best plastic for DDR4
- Dual 13A μModule Regulator with Digital Interface for Remote Monitoring & Control of Power
- Exploring the Business Model Evolution of High-Tech Equipment Manufacturers
InterviewCEO interview: China, not Apple, is way to go, says mCube CEO
Ben Lee, CEO of MEMS startup mCube, explains why he wants to spend $37 million on being a supplier of sensors to Chinese ODMs and avoiding a design win with Apple or Samsung.
Filter WizardCheck out the Filter Wizard Series of articles by Filter Guru Kendall Castor-Perry which provide invaluable practical Analog Design guidelines.
Linear video channel
READER OFFERRead more
This month, Altium Ltd is offering EETimes Europe's readers the chance to win one TASKING VX-Toolset for ARM Cortex-M Premium Edition, normally licensed for 2.395 Euros, for ultra-rapid prototyping and code development around ARM Cortex-M based microcontrollers.
The VX-toolset for ARM is the first TASKING compiler suite to receive the Software Platform technology, which is seamlessly...Read more
December 15, 2011 | Texas instruments | 222901974
Unique Ser/Des technology supports encrypted video and audio content with full duplex bi-directional control channel over a single wire interface.