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.
