By Julie Curnow

What’s Happening in the Solar Panel Industry in 2013?

Worldwide, government policy has distorted demand and supply in the global photovoltaic industry for many years. 2013 is already seeing changes in some of those distortions. To determine how this translates to solar power systems’ pricing in 2013 we need to look at basic economics  – price is set where demand equals supply. A History of Distorted Supply The Chinese government provided various incentives to solar panel manufacturing so there was massive growth in supply in 2011. This meant a price war occurred between solar panel manufacturers leading to a drop in solar panel prices. In 2012, close to 30% of Chinese companies in the photovoltaic industry ceased trading. This was mostly due to bankruptcy 1.
A History of Distorted Demand

  •  US tariffs 2 of 24% to 36% put in place late 2012 will stifle demand for Chinese solar panels.
  • Australia’s Solar Credit Scheme 3 artificially boosted demand for photovoltaic systems, until it ceased 1st January 2013.
  • Japan’s feed-in tariff reduced 10% on 1 April 2013. This will reduce demand for solar panels as Japan had one of the most attractive feed-in tariff rates in the world 4.
  • Europe may impose duties on Chinese solar panels, but we may not know whether tariffs will be imposed until June 5. If duties are imposed then the reduced demand may hinder any increase in solar panel prices.

2013 Impact Technological improvements have helped reduced solar power systems prices over the last few years. No further price reductions from technological improvements are expected in 2013. A reduction in solar panel supply and less competitive pricing may see a small increase in solar panel pricing in 2013. However reduced demand for Chinese solar panels as a result of tariffs in America and potentially Europe will dampen the demand for solar panels as well as reduced Japanese demand due to the lower feed in-tariff. With a reduction in demand and a reduction in supply forecast for 2013, it is hard to say whether solar panel prices will rise and by how much but they are unlikely to fall further because many Chinese solar panel manufacturers are already sustaining large losses and these cannot continue indefinitely.   Sources 1. 2. 3. 4. 5.

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