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Solar module prices in free fall

By Mark Halper | June 17, 2011, 6:20 AM PDT

Good news for fans of grid parity: the price of photovoltaics is in free fall.

Selling prices for modules made from crystalline silicon will drop to $1.00 per watt by early 2012, according to new research from IHS iSuppli.

Announcing the findings, IHS iSuppli notes that only two weeks ago –prior to last week’s Intersolar Trade Fair in Munich - prices had already declined to $1.49 per watt.

“By the time Intersolar wound up, prices had fallen to $1.30 per watt, ostensibly hastened by the market’s fear toward a flat—or worse, negative—market in 2012,” IHS states in a press release.

That’s almost as precipitous a drop as the Oakland Athletics’ winning percentage this month.

“The recent price decline was quickened by top-tier module brands dropping prices to aggressively position themselves, in the face of fears that the industry could be headed toward a down market next year,” said Henning Wicht, senior director and principal analyst, photovoltaics, at IHS.

“Not only could such a development ward off a dip predicted in solar installations for 2012, it also signals that deep-pocketed and lower-cost structured companies will be getting aggressive about pressuring competition out of the market during the next year,” added fellow IHS analyst Mike Sheppard in the release.

Of course, there’s more to the end-user price than just the module. Sheppard noted that overall system prices will be around $2.00 per watt, including inverters, cabling, racking, installation and other factors.

When those factors combined with the module come down to $1.00 per watt, then, voila, maybe we have grid parity that will improve solar’s ability to compete against fossil fuels.

“At $1.00 per watt we will have achieved grid parity in many regions; however that is not the only prerequisite for the solar market to grow,” said Sheppard in an email exchange with SmartPlanet. “There must be other elements that favor PV such as a need at the grid level for distributed power generation in order for us to see the real adoption in a market without subsidies.”

Photo: Solarnavigator.net

Related Post: Magnifying solar electricity’s future.

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About Mark Halper

Mark Halper is a contributing editor for SmartPlanet.

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very good

1. when will it spread to countries like india. it is prohibitively costly even now
2. why the price was held artificially high so far impeding growth

Posted by lisma

17th Jun 2011

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In

Solar not viable for a long time?

I have been off the grid with photo voltaic and wind for over a quarter of a century. I have all of the toys, microwave, TV, computer, washer dryer, frig etc. The only thing I do not have is a monthly bill. Yes, I have to buy new batteries every 8 to 10 years and am waiting for innovation in batteries. NO, my power does not go off because the grid is down because of storms, rolling brown outs, other disasters, or a car hitting a local power pole. I do not understand how people can be without power from their grid for days or weeks and not want to rethink the grid. It is not serving you well. Individual power supply, maybe many linked together in SMALL local systems would be good; but not mega polluters hundreds of miles away creating freight in, line and plant maintenance,and all the other off site mining and pollution problems.

Posted by LynnOpportunity

19th Sep 2011

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+1 Vote

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Good Development

This is a good development for people to remove themselves from the power grid and be more energy independant. It is still a huge cost but lower cost will help increase demand which will help lower costs. PV will not replace the power grid completely, there are the usual issues of storing the power for times when the days are short or the weather reduces sunlight.

Posted by sboverie

17th Jun 2011

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+2 Votes

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very good

1. when will it spread to countries like india. it is prohibitively costly even now
2. why the price was held artificially high so far impeding growth

Posted by lisma

17th Jun 2011

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+ -

Article proves solar will not be viable for a long time

The article implies that the current prices may be going lower because of less demand next year. That doesn't mean that the prices will not go back up again in the face of long-term growing demand.

The article also said that solar becomes competitive when the overall price for installed solar is $1 per watt. It also gave a current installation and infrastructure price of $1 per watt (do the subtraction of $2 installed cost per watt minus the $1 cost per watt of solar cells). That means that even if you got the solar cells for much less than $1 per watt, you still have to have dramatic reductions in installation and the infrastructure for solar to become viable. These factors are labor intensive and basically mechanical. It's hard to see these prices coming down nearly as fast as silicon solar cells under Moore's Law.

Finally, this still does not solve the storage problem. Most people will hook their solar arrays up to the public grid, and expect the grid to provide them power at night and on cloudy days. While these people may become net energy providers because of sunny days, it still means their power utility has to provide backup power to handle the slack periods. If too many people have solar arrays, the utility may find itself not running its power stations during the day but then having to run them at night and on cloudy days. That's highly inefficient and the added costs will have to be borne by ratepayers -- even those who have plenty of solar cells on their roofs.

Posted by zackers

Updated - 20th Jun 2011

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+2 Votes

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Solar not viable for a long time?

Posted by LynnOpportunity

19th Sep 2011

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+1 Vote

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Consumer prices NOT in free fall

Solar prices have fallen, certainly, over the years. However, the decline has been slow, not the "free fall" this article claims. Doing my own comparison over the past decade, prices per watt at the consumer level have dropped from $5/W to about $3/W. Hardly a precipitous plunge.

I'm glad to see the products becoming more affordable. But with no money to spend, and all the blustering and hype that's put global warming squarely in the "endangered species" column, people are not going to be flocking toward solar. Don't get me wrong, I'm still an advocate, but I'm a practical one.

The two major advantages of residential solar PV systems are: 1. reduced electricity costs to the homeowner, after about a 10-year payback; and, 2. mitigation of increasing the size of commercial power plants, because PV will reduce demand during peak energy periods.

The solar industry is mature enough to scale down and eliminate government financial incentives; subsidies in all industries should be terminated. PV has become "affordable enough" to make its own way in the market, where the momentum of increased production and falling prices will finally make it a commodity item.

Posted by Get-Smart

28th Jun 2011

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