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Speakers at the European Photovoltaic Industry Association's (EPIA) third International Conference on Solar Photovoltaic Investments confirmed that, like all industries, the solar photovoltaic (PV) sector has not been spared by the credit crunch. Medium to large scale PV plants are taking longer to be financed than ever before. They also stressed that the fundamentals of the PV sector remain intact, if not better than before, considering the price decrease of PV modules between 10 % and 20% since the beginning of 2009.
Module prices have dropped by 10% to 20% since the beginning of the year and this is very good news for the PV sector in general.
Given the current world uncertainties, all banks have strongly reduced their credit loans and the solar PV sector has not escaped the trend. Project financing appears to be a challenge for the industry. While it required around 4 weeks to obtain debt financing in 2008, today it takes 8 to 10 weeks, on average.
The perceived risk for all projects is higher, so fewer banks are engaged and they prefer smaller projects (less than €50 million). Speakers said that companies able to reduce their prices and companies at the forefront of PV technology should be the most successful in this climate. They also said that high quality PV projects meeting all legal requirements, from the planning to the operating phase, will be financed even if it takes longer than developers might be used to.
In addition, the EPiA and speakers at the conference recognized the module oversupply situation in today’s PV market. As a result, module prices have dropped by 10% to 20% since the beginning of the year and this is very good news for the PV sector in general. It remains to be seen how this will effect the market for the rest of this year, but most experts are hopeful that as economic recovery begins low module prices will lead to large volume sales.
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