Cheap Chinese solar panels fall behind Western rivals

PUBLISHED : Thursday, 11 July, 2013, 12:00am
UPDATED : Thursday, 11 July, 2013, 3:17am

Chinese solar manufacturers are still trying to sell panels at the lowest prices and have failed to adapt to an industry seeking more efficient components, said SunPower chief executive Tom Werner.

Prices for panels have plunged, and now make up less than half the cost of a system, he said yesterday. Customers are no longer seeking the cheapest solar panels, they want the cheapest solar energy.

"Most solar companies compete on price," Werner said. SunPower, the second-largest US solar manufacturer, has "transitioned to selling energy".

Chinese producers have been accused of selling solar panels in the United States and Europe below their production costs. Offering ever-lower panel prices has become a money-losing strategy for most solar companies, Werner said.

SunPower, based in California, focuses on delivering the most efficient panels in the industry. That lets customers produce electricity at lower prices, and makes his products more appealing, Werner said. The company said in May that it may post a profit this year, its first since 2010, on sales of US$2.6 billion to US$2.7 billion, from US$2.42 billion last year.

Expenses including labour and customer acquisition make up a greater portion of the cost of solar systems. Spending less on photovoltaic components would not have much effect on the bottom line, Werner said.

SunPower's panels use cells that convert as much as 24 per cent of the energy in sunlight into electricity. The company expects to reach 25 per cent in "a few years", Werner said. Yingli Green Energy, the world's largest panel maker by shipments last year, sells panels with efficiency rates as high as 15.4 per cent. Higher efficiency "allows you to produce more energy over time."

SunPower typically charges more for its panels and Werner said the higher efficiency justifies the price tag.

Panel prices make up about 20 per cent to 25 per cent of the cost of a solar system, compared with as much as 70 per cent in 2010 and 2011, said Ben Kallo, an analyst for Robert W. Baird in San Francisco.