According to IMS Research’s latest PV module pricing report, the average cost of Chinese Tier-2 crystalline PV modules dropped to US$0.96 per watt in January, representing an annualized price decline shift to 22%, after exceeding 50% in December. The report cites reduced incentive levels in the major PV markets at the end of last year as having the biggest effect on the prices.

The IMS report noted that competitive pricing from Chinese Tier-2 manufacturers has continued into this year and led to the average crystalline PV module price from these suppliers to fall twice as quickly as the total market in January. The report acknowledged that while other spot prices had been recently been offered below the US$0.96/W price, this marks the first time that the global average price has dipped below the industry milestone. IMS stated that prices as low as US$0.80/W were recorded for Chinese Tier-2 module suppliers last month; prices which were especially found when connected to large orders from German distributors.

Research analyst and report author, Jessica Jin commented, “Having enjoyed less price pressure than manufacturers in December ahead of FiT cuts in major markets, distributors’ prices were found to have declined faster than manufacturers’ prices in January. However, the average distributor price for Chinese Tier-2 crystalline prices still remained 25% higher than manufacturer pricing.”

“Following the political response to Germany installing 7.5 GW in 2011, significantly more than the Government’s annual target, it is considered highly likely that major amendments or cuts will be made to the FiT in the world’s largest market in the first half of 2012. The threat of these changes, combined with the attractive returns offered by the current system prices in Germany, is driving demand to remain unusually high in the first few months of the year,” concluded Jin.