China to lower solar panel prices to gain share

Gina Roos (11/23/2007)

Hong Kong — A new report from Global Sources says nearly 90 percent of solar panel manufacturers in Greater China plan to lower or keep prices stable, despite higher polysilicon prices, to win market share.

The "China Sourcing Report: Solar Panels" shows 88 percent of suppliers plan to decrease or keep prices stable, while only 12 percent plan to increase prices, although the polysilicon shortage is expected to continue until 2009.

The study also shows that most manufacturers are implementing measures to streamline production, which includes expanding to gain economies of scale, backward integration and R&D to produce thinner solar cells that require less polysilicon. Survey respondents also noted that they are planning to lower production costs by reducing waste, increasing automation and upgrading management systems. Others plan to focus on vertical integration and decreasing defects to improve manufacturing efficiency.

"Manufacturers are generally optimistic, with 97 percent expecting exports to increase over the next 12 months. However, with excess capacity in the high double-digits, a larger number of suppliers are reducing prices to gain orders," according to Spenser Au, report publisher, in a statement.

The biggest concerns cited by suppliers for the next 12 months include price competition and raw material costs. Other concerns include stricter overseas standards, design copying and labor shortages.