Solar module prices could fall as much as 20 percent this year due to an excess of supply in the market, the chief executive of solar project developer Recurrent Energy said on Wednesday. Solar modules currently sell for between $1.40 and $1.50 each, Recurrent CEO Arno Harris said in an interview and should come down to a range of $1.20 to $1.30.
"As the industry reacts to the shifts in Europe, we're going to see those kinds of changes become transparent to the market pretty soon," Harris said. Suppliers are cutting prices in reaction to pullbacks in generous solar subsidies in Italy, combined with the expansion of solar panel manufacturing capacity.
"The way we look at the situation right now, we are in an oversupply dynamic," Harris said, adding that, as prices come down, the US solar market could absorb some of the excess supply. Japan's Sharp Corp bought Recurrent for more than $300 million last year in a bid to expand its presence in the growing market for building solar power plants. Sharp is a major global manufacturer of solar panels.
But Recurrent is not bound to use Sharp products in its solar systems, Harris said. "I don't anticipate us using Sharp technology in our projects for some time," he said. "They have an existing business and existing distribution, and they are moving production through that channel, and we don't want to compete with their customers." As a result, Recurrent will be a customer of panel suppliers such as China's Suntech Power Holdings Co Ltd and Yingli Green Energy Holding Co Ltd "for the forceable future," Harris said.
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