The SNEC International Solar and PV Conference & Exhibition, in session from May 16 to 18, is taking up all 17 halls at the Shanghai New International Expo Centre. The size of the exhibition has multiplied since last year, an indication that China’s market potential is widely recognized. During yesterday’s Asian PV Industry Summit, prominent industry figures such as Suntech Power's Dr. Shi Zhengrong, China Electric Equipment Group’s CEO Cai Zhifang, and Canadian Solar Inc.’s Chairman and CEO Dr. Shawn Qu, as well as major manufacturers from Europe and the U.S. all indicate cost is the main factor in global PC industry development. The realization of cost optimization through grid parity remains the foremost goal for the solar industry.
According to EnergyTrend, a research division of TrendForce, interviews with many industry heavyweights indicate, the current cost structure renders a BOS (balance-of-system) price decrease unlikely in the short term. Therefore, the only way to lower system price is to start with the module portion – as such, improving module manufacturing cost and conversion rate are two important points for vendors. However, vendors indicate there is little room for improvement in terms of manufacturing cost due to the fact that raw material cost will not change anytime soon, so they will focus their efforts on improving efficiency. According to TrendForce, a 1% conversion rate increase translates to a 5-6% module cost reduction – this formula explains why high-efficiency product price has been less susceptible to decline compared to other products.
According to TrendForce reports from the exhibition site, the market outlook for the second half of the year is conservatively optimistic. Vendors believe price and installations on major markets are being controlled by policy – if there are unexpected changes on the market, stricter policies will be enacted to guide the market back to a normal state. Therefore, vendors believe price will not see drastic changes in the future, and profits will mainly come from cost structure improvement.
