December 1, 2011—As a result of the persisting price downtrend, the mid-stream Taiwanese solar cell makers have been facing deficits since the beginning of 2011. With the prices showing no signs of rebound in the near term, manufacturers have shifted the focus to the end market, bidding for the Taiwanese and foreign solar system installations through sole proprietorship, joint ventures or strategic alliances. Referring to the global market’s dynamics shift, it is inevitable for the Taiwanese manufacturers to place more emphasis on the end market, which is expected to bring a new challenge, according to EnergyTrend, the green energy research divsion of TrendForce.
Source: EnergyTrend
First, the issue facing the Taiwanese manufacturers is fund accessibility. Due to that it requires a considerable amount of fund to enter the large solar system bidding market, if manufacturers are unable to acquire the support from the banks or investment firms, it will largely burden the companies’ finance. In the mature markets such as North American and European markets, obtaining the Power Purchase Agreement is the key to acquiring financial support. As for a certain investment project of an anonymous company, the lack of Power Purchase Agreement adds uncertainty to the management of the power plant. Hence, EnergyTrend believes that it more risky to bid for that particular project than for other traditional projects.
Second, EnergyTrend is certain that Taiwanese manufacturers will be facing the “Local Content Requirement” issue in the future. Considering the policies of European, Indian and United States’ markets, the adoptions of the local products dominate the direction of the policies. Such logic stems from the goal to increase domestic job opportunities; European Union’s “FIT Premium,” United States’ “Buy America” and India’s “Local Content” are all in lines with the logic and a crucial factor for the aforementioned countries to decide whether or not to subsidize the related industries. Regions with great market potential, such as China, Southeast Asia, North and South Africa, will be the next major battlefield for the Taiwanese solar companies, which will also face the aforementioned issues.
EnergyTrend believes that “Local Content Requirement” has become a pressing issue and will in turn affect the capacity arrangement of the related manufacturers and their transnational management strategies and fund accessibility. Taiwanese companies which have entered or are planning to enter the market should predict the problems they will be tackling and come up with solutions beforehand.
As for this week’s spot prices, polysilicon, Si wafer, and solar cell price all remain on a downtrend. However, except for the mono-Si wafer price, the prices in the PV supply chain started to alleviate. Lowest polysilicon price remained at US$23/kg, while ASP fell to US$25.56/kg, a decrease of 1.12%. In terms of Si wafers, lowest multi-Si wafer price remained at US$1.0/piece, while mono-Si wafer price was US$1.4/piece. This week’s multi-Si wafer ASP dipped 1.86% to US$1.161/piece; mono-Si wafer ASP fell to US$1.609/piece, a decrease of 2.48%. The lowest solar cell price was US$0.47/Watt, while ASP fell to $0.518/Watt, a 0.19% decrease. In terms of module, PV module ASP fell by 1.19% to US$0.913/Watt. Looking towards the future, EnergyTrend believes that as the inventory level lowers, the chance of the prices hitting rock bottom is getting slimmer, and the price gap will continue to decrease.
