SolarWorld's Asbeck: Panel Prices to Drop 10% in 2009

By Jeff St. John

To the list of solar companies that have projected lower prices for their products in the near future — think Q-Cells (QCLSF.PK), Renesola (SOL), Solon (SGFRF.PK), Suntech Power Holdings (STP) and SunPower (SPWRA) — you can now add German solar panel manufacturer SolarWorld (SRWRF.PK).

Frank Asbeck, CEO of SolarWorld, said in an interview that he expects photovoltaic solar panel prices to drop more than 10 percent in 2009 and 2010, Reuters reported Monday.

That will push down SolarWorld’s profit margins by about two percentage points, Asbeck said. Still, he predicted that his company’s sales would grow 25 percent to 30 percent next year.

Asbeck pointed to an increase in global capacity — that is, an excess of supply — and the potential future phase-out of government subsidies for his predicted drop in solar panel prices.

Other solar panel manufacturers have blamed the ongoing economic downturn for causing customers to delay orders of solar panels. This delay has lead to reduced sales forecasts for next year (see Q-Cells Cuts Sales Forecast After Customers Delay Deliveries).

The U.S. dollar’s surge against the Euro — the currency of the world’s largest solar market — has also played a part in reduced forecasts for American and Asian companies (see Weak Euro Prompts Suntech to Slash Sales Forecast and Stocks Stumble After SunPower Lowers Forecast). The CEO of China-based Suntech told Reuters earlier this month that the company expects 2009 panel prices to fall by 25 percent to 30 percent from the third quarter of 2008.

Then there’s the expectation that prices for polysilicon, the main ingredient for most solar panels produced today, will fall dramatically next year (see Polysilicon Prices Head for Steep Fall), leading to a possible oversupply of panels and cutting into profits for some companies. Makers of silicon wafers, which are used to make silicon solar panels, also have reported seeing weaker demand (see ReneSola’s Profit Up 153.5%, Stock Tumbles on Weak Outlook).

Add to those concerns the reports of problems in the Spanish solar market (see Solar Fraud Could Eliminate Spanish Market), and you’ve got a whole host of headwinds for the solar industry next year.

Comments

[Road Runner:]

Only 10% down?! 10% is what I would expect from continued manufacturing scale and improvements. It has to be more than that considering the economy and oil prices.

2008 Dec 31 10:10 AM

[Fred W:]

Consider the messenger. Prices will drop in excess of 30% across the industry...Asbeck's is employing wishful thinking @ a 10% decline. Prices will have to drop over 40% to awaken the demand that will result where grid parity is reached or beaten. Suntech is predicting a 30% decrease in their product prices during 2009...a little more realistic than Asbeck.

2008 Dec 31 12:50 PM

[dicki31785:]

FYI This is an estimate that takes the base price from Q4 2008 meaning that a big price drop is already incorporated....and thus is not comparable to the STP prediction which has the base of Q3 2008 with kind regards from Germany CW

Jan 02 06:17 AM

[Fred W:]

Very true. However if you really believe that module prices will only drop 10% during 2009 you haven't been paying attention to the fact that Chinese suppliers are in the process of dumping product on the world market courtesy of substantial export subsidies coming from the Chinese government. They can actually lose money on the sale but then make a killing on the export subsidies. Do you really think the west can compete during 2009?

On Jan 02 06:17 AM dicki31785 wrote:

> FYI This is an estimate that takes the base price from Q4 2008 meaning
> that a big price drop is already incorporated....and thus is not
> comparable to the STP prediction which has the base of Q3 2008 with
> kind regards from Germany CW

Jan 06 11:37 AM

[Chad Brown:]

Very astute. Turned out to be a lot more than 10%


On 2008 Dec 31 10:10 AM Road Runner wrote:

> Only 10% down?! 10% is what I would expect from continued manufacturing
> scale and improvements. It has to be more than that considering
> the economy and oil prices.

Jul 28 08:55 AM