L R AS Published on Sunday 7 July 2019 - n° 284 - Categories:auctions
New world low price record: below $0.02 / kWh
The Brazilian auction A-4 awards 211 MW of solar power at a price of $0.0175/kWh, which is a new world record.
These 211 MW are distributed as follows
in five projects with a unit production capacity of 30 MW and a 61 MW power plant. The small projects were completed on the basis of $0.01688/kWh. The average price returned to $0.01752 per kWh.
Last week, 200 MW in Los Angeles were contracted on the basis of $0.01997/kWh, which is the lowest bid in the US.
The threshold of $0.03/kWh was crossed in 2017 in the Middle East and North Africa.
When companies bid for projects in the coming years, they try to anticipate price trends. The new batch of record-breaking solar energy projects indicates that system costs may fall even faster than the rate of decline usually expected. A recent study by Taiwanese market research firm Energytrend predicted that panel prices, particularly in the high energy segment, would fall in China, with the rest of the world set to see a ripple effect this week.
PV Magazine of1 July
Editor's note A new record low in the price of kilowatt-hours can only be welcomed. It is curious that it is taking place in Brazil.
The remark of a new and significant drop in the price of panels, which is reportedly in preparation, is explained on the one hand by the slowdown in PV installations in China: they will be comparable in 2019 to that of 2018, while production capacities have been increased. On the other hand, it would also be explained by the ambition of certain manufacturers to increase (almost inconsiderately) the volume of their production tool, who want to improve their cost price through economies of scale and stifle competition that cannot (or will not) follow this race to gigantism. Indeed, within twenty months, LONGi, Zhonghuan, Tongwei, ... will have tripled or quadrupled their production capacities, and perhaps also JinkoSolar (other manufacturers may be following this movement without publishing their ambitions). These producers will have a volume of production which will force them to sell, by breaking the prices. They will crush the competitors under the mass of products and prices. In two years' time, there will be only a small number of players left.
