After December Spike, PV Module Prices Set to Decline in 2012

“Desperate” installers rushing to complete installations ahead of FiT reductions in key end-markets caused a 7% spike in PV module prices in December, but look for a return to familiar pricing pressure within just a month, according to IMS Research.

Germany, in particular, was a major culprit as it added 3GW in the month alone. But the analyst firm’s latest monthly pricing report. which polls PV module pricing from suppliers, integrators, installers and distributors, suggests these pricing increases are only temporary, with both buyers and suppliers expecting price drops again within the month.

Even if temporary, that December price spike was welcomed after price pressures during most of the year; prices in September had eroded by more than a third since the end of 2010. That, compounded by high channel inventories, caused many manufacturers and distributors to write-down inventory and sometimes sell at a loss. Prices of c-Si modules direct from manufacturers were only up by 1% (their first positive month), though on the other end of the chain distributors were able to get as much as a 22% markup on c-Si modules, double the previous month, notes IMS’ senior market analyst Sam Wilkinson.

So what does 2012 hold for c-Si module pricing? At least to start, more of the same price pressure seen in 2011. IMS’ monthly survey finds that distributors, on average, expect a -4% decline in January — but their customers expect more than double that amount for the month.

Global crystalline PV module prices, average $/W — direct from manufacturer vs. from distributor. (Source: IMS Research)