Rumors of silicon panels’ demise, thanks to plummeting silicon prices that rendered manufacturers incapable of making a profit, were greatly exaggerated, as the number of installed silicon panels continues to soar.
As the U.S. market continues to boom, silicon panels are still the technology of choice for most rooftop and utility-scale installations, and the lowered prices have helped its spread.
“A crystal ball for panel prices over the last few years would have been a more valued commodity than Jack Sparrow’s magic compass,” says Jeff Juger, head of marketing for Hanwha SolarOne. “These days, U.S. panel prices seem to have leveled off some, and there are even forecasts of rising prices in the near future.”
“We may not have reached a final bottom, but there are several reasons to believe we will see more stable pricing situation in the United States going forward,” he adds.
Among the stabilizing factors Juger cites:
- Although some manufacturers still offer lower-than-market prices, it appears that the days of panel manufacturers seizing market share through unsustainable prices have largely dissipated.
- The first trade case pushed Chinese manufacturers to use non-Chinese cells (mostly from Taiwan). This meant that U.S. panel prices often hinged on the market pricing of Taiwanese cells. Since many are forecasting Taiwanese cell prices to rise over the next couple quarters, there seems to be a corresponding forecast in the rise of panel prices.
- Following a precipitous price decline, panels have accounted for a decreasing proportion of system costs over the last few years. The race for grid parity has largely rested on the backs of the panel manufacturers in the past, but if system costs are to continue falling, a larger share of the burden will have to rest on the backs of balance of systems and soft costs.
- Long awaited consolidation of the manufacturing industry would further stabilize panel prices. However, as long as insolvent firms revive, or others acquire their excess capacity, some of these oversupply issues may continue.
Photo by Dennis Schroeder / NREL
Beyond panel price, however, there are rumblings in the industry that silicon panels have reached their practical efficiency upper limits. With other panel technologies claiming new world records regularly, could lower efficiency numbers cause consumers to look elsewhere?
Juger doesn’t think so.
“Solely looking at efficiency ceiling would be an incomplete picture,” Juger says. “As with any technology, cost efficiency is a stronger indicator of longevity. If we can get the job done cheaply with a Ford, why pay more money to get it done with a Ferrari?”
“Crystalline panels have been getting the job done, and the financial institutions backing many of these deals are comfortable with this bread-and-butter of the solar industry,” he adds. “While there are always opportunities for disruptive technologies, crystalline silicon panels will still reign supreme for some time.”
The one recurring trend that could derail the continued growth of silicon solar panel proliferation, however, is the trade war with China. After having been “settled” in 2012, it’s back in the news again after a new complaint was filed earlier this year.
“AMC’s The Walking Dead has been an absolute hit,” Juger says. “The new trade war is anything but. Varying outcomes in this case would have various degrees of effect, but in the interim, the uncertainty in future pricing is already slowing utility-scale projects. Any additional disabling tariffs on the Chinese manufacturers will cause the aggregate U.S. solar market to shrink.”
Juger says the consolidation of panel manufacturers the industry has seen recently would be good for the industry —if only the companies that have exited would stay exited.
“Consolidation without dissolution means little to the panel market,” Juger says. “While we have seen several large players exit the solar panel manufacturing business, others have gobbled up that excess capacity.”