IMS Research: PV module prices declined by 44% annually in July

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  Despite module prices consistently declining throughout the last year, IMS Research found the outlook for prices for August to be more positive.

PV module prices had enjoyed a short period of stability in June due to high demand in Germany and Italy, but begun to decline again in July. Over June, average prices fell by more than 2% and 44% down annually, according to the latest monthly module price report from IMS Research.

Despite module prices consistently declining throughout the last year, IMS Research found the outlook for prices for August to be more positive and on average, industry buyers and sellers expected prices to increase by 0.3% in August.

However, expectations varied clearly by company type with module suppliers and integrators forecasting a further small decrease, whilst distributors expect a small increase.

“PV module suppliers’ margins are already dangerously low and in some cases negative, and their ability to lower prices any further is severely limited until they can make significant improvements to their cost structures,” commented Sam Wilkinson, senior analyst of IMS Research’s PV Group.

According to the report, average prices of crystalline PV modules purchased from distributors increased by almost 3% in June, driven by high demand in Germany, the world’s largest PV market. However, demand peaked in Germany that month as developers rushed to connect systems by June 30, before the grace-period under the previous and more attractive feed-in tariff rates expired. Distributors were able to capitalize on strong demand, giving rise to higher pricing in the run up to the deadline.

The resulting slowdown in demand following Germany’s grace-period deadline and the bleak outlook for demand in the second half of the year in Europe meant that module prices slipped again in July by 2.4%, as shown in the results of IMS Research’s monthly survey. Chinese Tier 1 module prices declined by almost 3%, whilst the largest decline came from western suppliers, whose prices declined by over 5%.

“PV module prices enjoyed a rare period of stability in June, but are once again under pressure as demand in a number of core markets has weakened in the second half of the year,” stated Wilkinson. “Although the industry has seen a number of significant exits from the market in the recent months, supply of PV modules still far exceeds demand and suppliers are continuing to engage in fierce price competition.”