PARIS – Average gross profits of crystalline photovoltaic (PV) industry module manufacturers fell to 9 cents per watt in the first quarter of 2012 and are expected to decline further to 7 cents per watt by the end of 2012, according to IMS Research market report.
The industry gross profit fell below $500 million in the first quarter of 2012, the lowest level since 2008 and more than 75 percent lower on an annual basis, stated the latest report from IMS Research. This results from continued price pressure and highly competitive market conditions.
“Profit margins have been the victim as suppliers have been forced to engage in a fierce price war and have reduced prices faster than they have been able to reduce their costs,” declared Sam Wilkinson, IMS Research senior market analyst. “High inventory levels, weak demand and reduced government support for PV have all contributed to a rapid downward spiral for PV module prices.”
IMS Research said it expects that gross margins will stabilize at nine percent on average in the second half of 2012, with additional price declines offset by improvements in non-silicon processing costs and continued declines in blended silicon purchase prices, which are forecast to reach $25/kg in the third quarter of 2012.
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@Dylan: I agree, it is no wonder that we hear PV companies shuttering one after another. I would have expected the equipment companies to do slightly better but the link you cite above shows them not meeting the ratio of 1.0 any time soon!
This is not good. Not surprisingly, the market for PV manufacturing equipment is also not looking so hot. Here is an excerpt from a report released Tuesday by the semiconductor and PV manufacturing equipment trade group SEMI:
"Worldwide photovoltaic manufacturing equipment billings declined for the third consecutive quarter, falling another 20 percent for the quarter and 60 percent from the same quarter last year, according to the SEMI Worldwide Photovoltaic Equipment Market Statistics Report for Q1 2012. The reported total quarterly billings of $695 million declined to the lowest level since the start of the data collection program in Q1 2010."
See the full report here: