According to the Gold Member Solar Report by EnergyTrend (Q3 2018), monocrystalline module prices have fallen almost 20% this year, while those for polycrystalline modules have dropped by more than 25%. Increased consolidation among manufacturers and developers is expected to occur in China and the global solar market, with more merger deals, plans for capacity reductions and even factory closures.
Global module demand is also experiencing geographical shifts.
Image: Flickr/Alberto Martinez
Average prices of mono- and poly-crystalline modules have fallen by 19.8% and 25.5%, respectively, in the first three quarters of this year, according to EnergyTrend, a division of Taiwanese market research company, TrendForce.
“If solar PV generation is to come very close to grid parity in China at the start of 3Q19, then prices of conventional mono-Si and conventional multi-Si modules will have to drop by another 2.8% and 9.8%, respectively, during the nine-month period from the start of 4Q18 to the end of 2Q19,” the report’s authors stated.
As a consequence of this difficult-to-sustain price drop and overcapacity in the industry, the global solar market is expected to enter a stagnant phase, and will see more consolidation. Total PV demand for 2018 is forecast to reach just 86 GW, as several developers last year moved their installation target dates forward in China, thus shifting demand originally reserved for this year, to 2017.
In terms of production, however, the manufacturing of cells and modules is expected to reach each 150 GW in 2018. “On the whole, the oversupply problem has become more acute,” EnergyTrend said.
Global module demand is also seeing geographical shifts, as India recently introduced 25% safeguard duties on some imports, while the EU ended minimum import prices imposed on PV products imported from China, Taiwan and Malaysia. “As a result, China-made PV modules are again flowing into regional markets that they were previously barred from,” continued the report.
Referring to the difficult situation of Taiwan’s solar manufacturers, EnergyTrend analysts further highlight that Chinese cell and module makers may also adopt measures to face overcapacity and consolidation, including merger deals, capacity reductions, and even factory closures.
Such movement has already been seen in the Chinese industry, withChinese solar PV manufacturer and clean energy company, Shunfeng International Clean Energy (SFCE) announcing two weeks ago that it hopes to sell its manufacturing unit to one of its shareholders, Asia Pacific Resources Development Investment Ltd.
Shanghai Electric also submitted a bid to take a controlling stake in China’s largest polysilicon maker, GCL-Poly, although the proposed CNY12.75 billion ($1.86bn) agreement fell through, because “both parties believe that the timing and conditions for proceeding on the potential disposal [by GCL-Poly] are not mature enough.”
In a previous report at the start of August, EnergyTrend found that prices across the PV supply chain are falling further, although they will likely stabilize.