Solar industry braces as looming glut threatens to erode prices

JOE RYAN
NEW YORK — Bloomberg News
Published Wednesday, Aug. 24, 2016 4:54PM EDT
Last updated Wednesday, Aug. 24, 2016 7:32PM EDT

Solar manufacturers that are ramping up production now face a looming glut of panels, forcing companies to adjust or face dire consequences.

Trina Solar Ltd., Canadian Solar Inc. and JinkoSolar Holding Co. are among the suppliers boosting output at factories that will expand global capacity by 18 per cent this year, according to Bloomberg New Energy Finance.

The manufacturers are locked in a race to build bigger and more advanced factories to crank out panels faster and more cheaply. Just as they start rolling off the lines, demand is expected to slow, especially in China where the government rolled back subsidies last month. Prices are slumping, and suppliers expect margins to slip as well. It’s a pattern we’ve seen before, after a global oversupply five years ago drove dozens of companies out of business.

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Renewables more affordable? The price of solar is declining to unprecedented lows

Despite already low costs, the installed price of solar fell by 5 to 12 percent in 2015 

ROBERT FARES, SCIENTIFIC AMERICAN

The installed price of solar energy has declined significantly in recent years as policy and market forces have driven more and more solar installations.

Now, the latest data show that the continued decrease in solar prices is unlikely to slow down anytime soon, with total installed prices dropping by 5 percent for rooftop residential systems, and 12 percent for larger utility-scale solar farms. With solar already achieving record-low prices, the cost decline observed in 2015 indicates that the coming years will likely see utility-scale solar become cost competitive with conventional forms of electricity generation.

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