Prices for solar power equipment are likely to resume their decline later this year as production exceeds demand, according to energy executives at an industry conference in Xining.
A major clear-out of excess inventory - from polysilicon to panels - by producers pushed prices down by 20 to 40 per cent across the supply chain in the past five months.
'I believe solar component prices will stabilise in the next three to four months before they resume their downtrend,' Liu Junfeng, deputy director general of the National Development and Reform Commission's Energy Research Institute, told the CBI China Solar Industry Leadership Summit.
He said analysts were projecting this year's global demand for panels to reach 18 gigawatt to 20 GW, up from earlier estimate of 15 GW to 17 GW. Last year's installation was 16.6 GW. One GW of capacity is enough to meet the needs of around 800,000 mainland households for a year.
Liu's optimism is shared by analysts at Fitch Ratings. Increasing demand for clean and safe energy, the improved efficiency of solar panels and lower equipment prices will spur demand in the medium term, the rating agency said.
The silicon-based solar industry has a long supply chain that begins with the manufacture of polysilicon, followed by wafers, cells and panels.
