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
Bosch brings electronic fuel system, connectivity to Asian motorbikes
October 31, 2014
With an electronically controlled fuel injection system for motorcycles, supplier Bosch is offering a more efficient alternative ...
NXP extends NFC ecosystem to the car
Japan's MegaChips to buy MEMS maker SiTime
Freescale CEO: 'IoT isn't just buzz'
3D prints world's best inverter
Research project significantly improves electronics reliability
October 29, 2014
The RESCAR 2.0 research project helps to improve reliability and resilience of electronic systems in vehicles, in particular ...
Netscout Acquires Communications Businesses From Danaher
"Quality happens at the system level, not just at the product level"
Some memories never die
- Wireless Power User Guide
- Secure is the New Smart
- 5 Best Practices for Designing Flexible Test Stations
- Intelligent PLCs Expand the Internet of Things
InterviewFreescale CEO: 'IoT isn't just buzz'
Coming after the solid third quarter results that produced higher operating margins and improving cash flow, Freescale Semiconductor's CEO Gregg Lowe had every reason to be chipper and lively when EE Times ...
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, Oscium is giving away three of its iMSO-204L dual analogue iOS oscilloscopes, worth USD400 each. Designed with native Lightning compatibility, the iMSO-204L transforms the iPad, iPhone, and iPod touch into an ultra-portable, two-channel oscilloscope.
Since Apple changed its connector, Oscium has been working to bring native compatibility to its customers. The third generation...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.