Big Solar Energy Price Declines Expected

November 7, 2008

Tired of waiting for solar photovoltaics costs to finally drop? Looks like the wait is almost up. Average Selling Prices (ASPs) of solar photovoltaic modules are expected to decline 20% in 2009 and 25% in 2010.

After subsidies, Plan B for module makers is to sell products at a discount to keep inventory moving. It helps that manufacturing costs continue to decline about 10% each year, thanks to design improvements and benefits of scale. But it seems a little coincidental that most solar companies happened to predict the ASP for their products will decline at the exact same rate.

Analysts from Deutsche Bank (nyse: DB – news – people ), UBS (nyse: UBS – news – people ), Hapoalim Securities and Goldman Sachs all reached a different consensus, namely that ASPs will need to decline closer to 20% in 2009 to absorb excess inventory, and as much as 25% the following year.

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