EU Solar Panel Prices Are Set To Lower By 30%

At the stroke of midnight on September 3, the industry has celebrated at the news the European Commission will end merest import prices (MIPs) for solar PV cells and modules from China, Taiwan, and Malaysia.

Josefin Berg, an analyst at IHS Markit tells pv magazine that they demand module costs in Europe to descend for new contracts by as much as 30% in the coming weeks.

“For project developers and EPCs, such a cut will immediately drive down total project system costs and the corresponding LCOE and raise project margins for already contracted projects,” she states.

Bloomberg NEF’s head of solar, Jenny Chase tells pv magazine that considering the absolute MIP was US$0.30 for multicrystalline modules, and $0.35 cents for monocrystalline modules as of the termination of July, she believes the cost decline will be less than 30% “because nobody was paying this much (they were using South-east Asian modules).”

Solar Panel Prices Drop

She maintains, “We expect multi prices by the end of the year to hit about 24 US cents. But a % drop is always subject to the question of what you are taking as a baseline.”

Last week, Taiwan-based EnergyTrend said it had witnessed a further reduction of solar cell prices, especially in the segment of high-efficiency mono-crystalline cells. Following the discontinuation of MIPs, a new cost war will entail, it said. In focus, solar cells originating from China will create direct conflict with those arising from Taiwan.

Today, Berg said that the most significant impact of the decision would be to spur 40% year-on-year growth in fresh PV installations in Europe in 2019. “In particular the developers of large utility-scale projects under development in Southern Europe, both under government programs and with private PPAs, will benefit from the increased competition among suppliers,” she states.

Panel Installations

In IHS Markit’s latest PV Installations Tracker, which was published in June, the examiners had already assumed, as the most likely scenario, that the MIP would not be prolonged after September. “So we keep with our forecast for PV installations in Europe which is about 12 GW in 2018 and 17 GW in 2019,” states Berg.

Competition is also set to increase for module sales to Europe. “South East Asia manufacturing capacity will lose its competitive advantage on the European market, as imports from China will increase. The only clear market left for South East Asia capacity will be the United States, and possibly India depending on the evolution on import tariffs for Chinese modules and cells,” she proceeds.

She couldn’t say, however, how many of U.S. or Indian demand could now be satisfied with SE Asia modules.

Abundant a vocal challenger of the tariffs, association SolarPower Europe has hailed the decision, declaring it a “watershed moment”, and a “new solar age” for the European solar exchange.

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