Nuying Huang, Taipei; Adam Hwang, DIGITIMES [Wednesday 29 October 2008]
While contract supply prices of solar cells for 2009 currently stand at US$2.8-3.1 per watt, a few makers of solar cells in Taiwan and China have offered lower quotes in negotiating 2009 supply contracts in an attempt to win contracts and thus obtain advance payment (usually 5% of the contract value), according to industry sources in Taiwan. Consequently, Taiwan-based makers of PV (photovoltaic) modules that are already signing supply contracts plan to ask suppliers of solar cells to lower contract prices, the sources pointed out.
In addition, price drops in the spot market for solar cells have brought pressure on contract suppliers of solar cells to reduce contract prices, the sources indicated. Spot market prices of solar cells have fallen from US$3.8/watt at the end of August 2008 to US$2.8-3.0/watt currently, approximately the same as contract prices, and are expected to drop further, the sources indicated.
If spot market prices of solar cells slip to below contract prices with a large enough gap, PV module makers subject to supply contracts will be willing to sacrifice 5% advance payment (due to default in contract) and procure less expensive solar cells in the spot market, the sources explained.
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