Report Predicts China Solar Panel Export Prices to Increase

February 14, 2007

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Sixty-seven percent of China’s solar panel manufacturers plan to raise export prices in 2007, according to Global Sources’ China Sourcing Report: Solar Panels.

“Solar cell prices, which have increased by about US$0.30 per watt in the past two years, are expected to rise further, driving the cost of solar panels higher,” said Global Sources general manager of Content Development, Michael Kleist. ”With margins at about five percent for many manufacturers, the market is expected to continue to be challenging in the months ahead.”

Among surveyed solar panel manufacturers’ top concerns and primary challenges for the next 12 months:
    — 56 percent cited higher raw material costs;
    — 20 percent said price competition;
    — 14 percent cited design copying/piracy; and
    — 10 percent said power and labor shortages.

“In order to increase profit margins, many manufacturers say they plan to increase capacity to gain economies of scale,” said Kleist.

According to surveyed manufacturers:

    — 22 percent plan to increase capacity by more than 50 percent;
    — 20 percent expect increases of 20 to 50 percent;
    — 50 percent plan increases of up to 20 percent; and
    — 8 percent plan to maintain current capacity.

“One bright spot for China’s exporters is the EU,” said Kleist. “Due to favorable legislation, which includes financial incentives encouraging the use of renewable energy, many manufacturers are targeting exports to this
market.”

Among surveyed manufacturers:

    — 74 percent plan to focus on exporting to the EU;
    — 20 percent plan to target exports to the United States; and
    — 6 percent plan to focus on the Mideast/Africa and Asia.

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