Opening of Intersolar Europe 2011 and half-yearly financial report releases lead PV market development

TAIWAN: According to EnergyTrend’s survey, the spot price quotation this week is quite stable, compared to last week. However, the PV market demand remains uncertain. From the subsidy policy's point of view, Germany is considering a further 6 percent cut in previously scheduled solar subsidy cut, and there was only a slight subsidy cut in the mid 2011. In addition, the uncertain factor of the Italian policy has resolved.

With policy catalyst from Germany and Italy, the market demand is expected to recover in the second half of the year. In addition, PV manufacturers are going to report their half-yearly financial results. In order to reduce losses resulted from mark-to-market valuation, manufacturers will try more aggressively to reduce their high-cost inventory. Under the aforementioned circumstance, EnergyTrend believes that the possibility of major price distortion will appear during Intersolar Europe 2011, which may cause another uncertain factor for the PV market development.Source: EnergyTrend, Taiwan.

The latest survey showed that the lowest polysilicon price has remained at 50/kg, but the average polysilicon price has rapidly decreased by 4.1 percent, to $55.14/kg. Since some Si-wafer and solar cell manufacturers have resold their inventory in the market to reduce their inventory. It is believed that the polysilicon price may decrease below $50/kg during Intersolar Europe 2011. In terms of Si-wafer, manufacturers still face considerable price pressure, the average price of multi-Si wafer and mono-Si wafer has respectively fallen by 1.91 percent and 3.16 percent, to $2.259/piece and $2.602/piece.

Furthermore, the lowest solar cell spot price has stayed at $0.8/Watt, and the average price has dropped by 1.8 percent, to $0.872/Watt. Due to possible German policy changes, manufacturers might be stimulated pull in their procurement earlier which spreads conservative attitude in the market. On the other hand, the average price of module continued to decrease by 1.33 percent, to $1.335/Watt.

The average price of PV inverter has slightly decreased by 0.82, to $0.24/Watt. Since there is no obvious recovery of demand in the market, and the inventory in stock still remains at a high level. Despite the positive effect of the German policy change, the conservative approach toward the market development still remains while manufacturers aggressively try to reduce their inventories.

According to EnergyTrend’s latest survey, the speed of inventory clearance is still slow. However, the shipment in the German market is stable, and the policy change may have positive influence on the currently gloomy market condition. EnergyTrend believes that the current inventory in stock is as much as 7GW, and even the German market demand alone will not be able to suffice for market recovery in the second half of 2011.

On the other hand, the Chinese, US and Japanese markets’ total planned demand is as much as 5GW in 2011. However, it is uncertain that the planned demand can be realized, which is a key factor for the market development in 2H11. In addition, EnergyTrend noticed that there is a slight change to the western countries’ attitude toward renewable energy development; wind power might become the first choice among various renewable energy sources.

For instance, Germany has announced that they will abolish nuclear energy generators by 2022, and wind power is to replace nuclear energy. It is obvious that the western countries have noticed that PV industry is rather underdeveloped in terms of readiness. Therefore, it is believed that wind power is a potential replacement for nuclear energy since the western countries own key technologies, main market development, competitive strengths, and low cost of power generation, compared with that of solar energy.