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
Can Kevlar prevent lithium-ion battery fire risks?
January 28, 2015
University of Michigan researchers have used nanofibers extracted from Kevlar to develop a barrier between the electrodes ...
VTT sets up Cyber War Room
320x320-mm OLED panel claims world's highest lumen-price ratio
Yugo Systems externalizes FPGA debug with new hardware
Rambus readies lensless image sensor platform
Securing the software supply chain
January 28, 2015
The latest attack on Sony Pictures by malicious hackers continues to evolve as an international story line. What we know ...
Connected Car: Dramatic growth ahead
The automation obituaries
TSVs to split more chips: re-integration is the focus
- Sensing Elements for Current Measurements
- Investigating Die attach Failure in IGBTs using Power Cycling Tests
- Power Semiconductor Failure Diagnosis using Thermal Characterization and Power Cycling
- Top 5 Trends in Product Development and Test Engineering
InterviewCEO interview: Bosch's IoT startup is all about the system
Thorsten Mueller, CEO of Bosch Connected Devices and Solutions GmbH (Reutlingen, Germany), has been guiding the latest startup subsidiary of Robert Bosch GmbH since 2013 when he started the initiative ...
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
To ensure you have a good start in 2015, Freescale is giving away five of its QorIQ TWR-LS1021A Tower system modules, worth USD269 each, for EETimes Europe's readers to win.
The module is the most feature-rich and high-performance Tower system offered by Freescale, enabling compatibility and interoperability with the growing list of Tower expansion modules, offering an easily accessible...MORE INFO AND LAST MONTH' WINNERS...
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.