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

by: Greentech Media

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 (OTCPK:QCLSF), Renesola (NYSE:SOL), Solon (OTC:SGFRF), Suntech Power Holdings (NYSE:STP) and SunPower (SPWRA) — you can now add German solar panel manufacturer SolarWorld (OTCPK:SRWRF).

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.