L R AS Published on Monday 6 September 2021 - n° 372 - Categories:the prices

pvXchange's market commentary on 25 August: prices will continue to rise

Since the previous low in September 2020, prices for new panels from top brands have already risen by an average of 20% to a level not seen since April 2019.

There is no prospect of stopping the surge in PV panel prices.

Developers have the choice of postponing the construction of their project indefinitely, or buying the panels knowing that they are too expensive!

For once, the products available on the short-term spot market are cheaper than the products to be ordered. The latter still have to be produced and shipped - a world turned upside down! This is due to the disruption caused by the pandemic, which has disrupted economic circuits, increasing freight and costs. It is also due to the high demand in many countries, including Germany. Freight costs between Asia and Europe have increased tenfold, bringing the freight share of the panel price to 0.05 or 0.06 €/W. This means that transport costs no longer account for only 2% of the total price, but up to 20%!

The price increase has dampened demand. This has prompted Chinese producers to reduce their deliveries, to wait for freight costs to return to a reasonable level, or to offer FOB (free on board) prices, which leaves the cost of transport to the buyer and makes it impossible to predict the cost price.

The constant rise in the price of raw materials and semi-finished products is eroding the margins of manufacturers and retailers. When these costs are passed on to consumers, they fuel inflation. This is a vicious circle that can probably only be broken by increasing local value creation and reducing international goods traffic.

This raises the question of whether the upward spiral in prices will necessarily lead to an imminent market collapse. This is unfortunately a matter of concern!


pvXchange of 25 August 2021

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