Prices of solar cells last week continued to spiral to approach cost-level and the decline is expected to accelerate due to a supply glut, TrendForce Corp (集邦科技) said.
TrendForce attributed the slump to sagging demand amid uncertainty about Beijing’s new “green” energy policy and subsidy measures, the Taipei-based researcher said in a statement released on Tuesday last week.
Demand from the US and Europe are likely to be lukewarm as no new subsidy programs are available to drive solar system installations, the researcher said.
Solar power companies are expected to take a wait-and-see approach to placing new orders for next quarter, given the current price downtrend, it said.
As a result, TrendForce analyst Corrin Lin (林嫣容) expects “photovoltaics manufacturers in China and Taiwan to see sharp drops in incoming orders in late June,” according to the statement.
In the wake of aggressive capacity expansions in the first half of this year, solar companies are likely to be under pressure to cut prices to digest new capacities in the third quarter, TrendForce said.
The price of multisilicone solar cells produced by Taiwanese manufacturers fell on Wednesday to US$0.293 per watt, while prices of high-efficiency multisilicone solar cells dropped to US$0.295 per watt, according to the latest price information from TrendForce.
Taiwanese and Chinese manufactures have “no leeway to cut prices further,” Lin said.
Drastic price declines are squeezing gross margins to “nearly zero,” the researcher said.
Downward solar prices are expected to extend into the second half because of an oversupply, according to TrendForce.
Overall this year, global solar cell capacities are expected to grow by between 13 gigawatts and 15 gigawatts annually, greatly outpacing market demand of a mere 4 gigawatts year-on-year increase, TrendForce predicted.
As market demand slows, solar companies are likely “to face great challenges during the slowdown this year and next year,” TrendForce said.
The nation’s major solar cellmakers, Neo Solar Power Corp (新日光) and Gintech Energy Corp (昱晶), reported 9.94 percent and 4.9 percent sequential growth in revenue last month to NT$1.7 billion and NT$1.63 billion, (US$52.75 million and US$50.5 million) respectively, thanks to higher shipments.
Despite concerns over a potential slowdown in the Chinese market next quarter, Gintech said it was confident about market demand and would continue to run equipment at 100 percent to cope with seasonal demand in markets beyond China during the second half of this year.
Neo Solar is also pinning its hopes on seasonal demand to propel its growth next quarter. The company expected production lines in Malaysia to begin operations by the end of next quarter, which would help the firm tackle rising customer demand.
Neo Solar shares sank 1.14 percent to NT$17.3 on Wednesday, while Gitench shares were unchanged at NT$23.7.
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