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PV: Aiming for 50GW in 2014? April 7, 2014

Posted by Maury Markowitz in solar.
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Pie chart showing worldwide shipments of solar panels in 2013, dominated by China, Taiwan and Japan.Paula Mints’ superb article on PV shipments in 2013 has numerous tidbits for the interested reader. For myself, it was the predictions at the end that stood out.

Basically, Mints’ demonstrates how worldwide potential to build panels turns into actual panels. In 2013 there was about 41 GW worth of capacity which turned into about 34 GW of panels, a duty cycle of around 83%

If you trace that forward with known capacity expansions coming online in 2014, and combine that with the expected flows (similar to the graph above), that puts us on a trajectory for 49 GW in 2014. As Mints’ points out, however, there are a number of factors that make this unlikely, notably a slowdown in Europe.

That said, looking back over the last couple of years, the pattern is clear. When companies overproduce, fire sales follow, which sell into markets that were otherwise marginal. The market is essentially infinitely flexible, given the right price points. If this pattern continues, some significant fraction of that capacity will be used, and the worst-case outcome is additional price depreciation as the year goes on.

I never thought I’d see panels below $1 retail, but such is commonplace today. With MW-sized orders in the 50 to 60 cent range, one might go so far to predict retail prices down around there by end of year. Combined with the expected rapid decline in inverter prices due to new Chinese entrants this year, it seems we are well on our way to $1/W systems at the residential end of the scale.

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Comments»

1. Karl Dockstader - April 16, 2014

Anything under $1/w might not be enough to sustain a North American industry. Say what you want about content requirements in Ontario, it gave people peace of mind to know that their high tech manufacturing was done in North America. Things have changed; Chinese inverters are unproven and now that Ontario chickened out to WTO pressure and dropped content my fear is that solar electronics will be “Walmartized” and set this industry back to the Jimmy Carter/Pierre Trudeau days.

Trust me, I see the benefit of $1/watt in terms of volume, but it would nice to couple sustainable energy with an economically sustainable industry. Prices leveling off could create a path to an industry that continues to drive innovative technology forward, instead of “falling prices” driving quality into the ground.

Grid Parity, the vaunted holy grail of renewable industries, will likely roll into the North American energy price bubble bursting faster than the price of solar plummeting. In 2013 panel and racking prices seemed to level off and plateau. Inverters are poised to do the same after this early 2014 price drop, what else could drop in price if the systems aren’t going to be total trash?


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