Solar PV prices have fallen dramatically in 5 years. Since 2008, PV prices have fallen roughly, on average, 38% per year, with rougly a 58% price drop in 2012!
In 2008, a 245W PV module would sell for around $2,500. Today, in 2013, a 245W PV module sells for $294, which is a remarkable 88% drop!
To put this in even greater perspective, let's look at system prices:
A SF GT 5.9 is a 5.9kW grid tie system that has become increasing popular in the last 18 months. In 2008, this system would have had a selling price of $77,000...$77,000!! Right now, in March of 2013, this system carries a selling price of $17,000...a 78% drop!
A SF HP 5.9XW is 5.9kW battery based system, which is our most popular off grid system. This system, in 2008, would have a selling price of $85,000. In 2013, pricing has dropped to $26,611...a 70% drop!
So, clearly, the falling prices have brought PV systems into the realm of affordability. Now, solar system can deliver energy in a economical manner, which was not possible 5 years ago.
We are going to ignore the downstream market (the good, which is falling prices to the consumer) and focus on the upstream market, which are the manufacturers.
Post 2010, we started seeing a capacity imbalance, where supply capacity started to exceed demand capacity. This accelerated in 2012, and is forecasted well into 2016.
So, as the above forecast shows, polysilicon capacity is going to run at around 100% compared to PV demand. This imbalance is going to continue driving PV prices downward, which puts immense pressure on PV manufacturers. And, not only is this pain reserved for the PV manufacturers, as lower PV prices are now starting to put immense pressure on 'balance of system' manufacturers, such as inverter, mounting/racking and battery manufacturers. All manufacturers are feeling the pain of a maturing market.
Massive amount of company failures.
In 2010, there were over 700 PV manufacturers. By the start of 2013, this number was around 150. The rapidly falling prices have created hundreds of casualities, including former industry leaders such as Q-Cells. Q-Cells, 6 years ago, was valued at 8 billion Euro. At time of insolvency, Q-Cells was valued at 35 million Euro...a 99.6% drop in value!
By 2016, the current 150 manufacturers of today, will be further consolidated to handful of manufacturers, operating on thin margins and huge volumes.
Why is this important to talk about...well, are considering purchase a PV System? Considering many of the current manufacturers will no longer be in the market in 2-3 years, it is extremely important to purchase a system that is from reputable manufacturers and suppliers that will be around to provide service and support in the future. Tempted to purchase that discounted PV module or inverter on the internet? Considering a PV system should last several decades, it is important as a buyer to determine if the lowest purchase prices is the most important or if quality and longevity are the most important. There are already thousands of PV modules, inverters and other equipment that no longer has any warranty or support due to company failures; a 25 year product warranty is only as good as the manufacturer that is building the product...choose wisely!