L R AS Published on Saturday 25 April 2020 - n° 319 - Categories:the prices
The coronavirus is slowing down the demand for panels. Prices are tending to fall.
The coronavirus is slowing down the demand for panels. Prices are tending to fall. Small manufacturers face an uncertain future.
Now that the United States is affected by the pandemic, demand for new solar equipment has slowed down. Now, price cuts are continuing.
in China, Europe and Australia, and now on the American market. This comes on top of the supply disruption and uncertain demand around the world.
Some manufacturers are slowing their production rate. SunPower announced this week that its production lines have been shut down for the next few weeks. Other manufacturers remain in business, such as Jinko Solar, which is maintaining its 2020 targets. First Solar is continuing production, but indicated at the end of March that its forecasts are likely to change.
Worldwide, the supply of panels exceeds demand. At the moment, it is difficult to predict how the situation will develop. Global demand is being disrupted to a large extent. As a result, excess manufacturing capacity is unlikely to be absorbed soon.
Before the pandemic, the demand for panels in the United States was estimated at 18 GW in 2020. The supply comes from South East Asia where production capacity reaches 25 GW. This is almost double the American needs, which have now been reduced to 16 GW.
Europe, Australia and Japan recorded a 5 to 7% drop in panel prices in the first quarter of 2020. The United States could see a 10% drop this year, based on current estimates.
These declines could significantly affect smaller manufacturers. Lower market prices will stimulate developers despite the constraints of the pandemic. Large, well-capitalised manufacturers such as Jinko and First Solar could benefit. Installers who focus on an industry segment such as residential or commercial, such as SunPower, may face more pressure.
In a downturn, when buyers are thinking about what panels they are buying, they need to think about who will survive this pandemic. The panels have a 25 to 30 year warranty. Developers will give preference to manufacturers with good financial standing. Buying panels from a company that goes bankrupt creates problems later on. Small manufacturers therefore have an uncertain future, such as CSUN in China or Seraphim in the USA. Large manufacturers are sometimes heavily indebted, such as Jinko Solar, which has a debt of $1.9bn at the end of December.
GreenTech Media of 22 April
Editor's note The article is written by an American by American standards and not Chinese. Over there, the support of financial institutions is unfailing when it is not combined with the support of local governments. This means that small Chinese manufacturers will get the support they want. It also means that the willingness to significantly increase production capacity, combined with lower demand, will lead to a very serious crisis among producers. The fall in prices will be well beyond the figures announced above. The situation of the manufacturers will boil down to selling at any price, even at a large loss, in order to hold on. Any restriction of production would condemn those who would take the decision to do so. This situation will occur in May and June, on condition that the pandemic appears to have been brought under control...
