Solar module prices increased by 7% in December 2011 due to a temporary pick-up in demand ahead of feed-in-tariff (FiT) reductions in a number of key markets, according IMS Research. Strong demand during the year-end rally saw installers buying solar modules from distributors at inflated prices. IMS Research found that installers were desperate to secure supply and complete installations before incentive levels were reduced, particularly in Germany where 3GW of installations were connected in December alone. However, IMS Research also found that price increases were only temporary and both module suppliers and buyers expect price drops again in January 2012.
Fourth-quarter's strong spike in demand offered manufacturers much-needed relief from the intense price pressure that blighted them for much of 2011. According to IMS Research, prices of crystalline modules purchased direct from the manufacturer in December increased for the first time in the year, albeit by just 1%. Distributors, however, were able to take full advantage of spiraling demand in their local markets and their prices for crystalline solar modules increased by 10% on average. Distributors were also able to increase their mark-up on modules in December, on average selling crystalline modules for 22% more than they purchased them for, almost double the previous month.
High channel inventory levels, as well as rapidly declining prices for solar modules throughout most of 2011 had plagued manufacturers and distributors with many having to write-down inventory and in some cases, sell at a loss.
Following a year of unprecedented price declines, price developments for 2012 are now a much talked about subject. As part of its monthly survey, collecting solar module pricing from suppliers, integrators, installers and distributors, IMS Research also identified expectations of how prices will develop throughout the supply chain in January 2012. The survey found that whilst on average distributors expected a decline of just 4%, their customers expected prices to decline by more than double that amount during the month.
Article translated by Jackie Chang
