Shock as solar prices finally rise

Has the photovoltaic industry's agonizing four-year run of squeezed profits and bankruptcies ended? And will people still buy as the cost climbs?

The sun rises in Berlin, where solar panel prices also look like they're climbing. Germany is one of the world's largest solar markets.

There's a lot of physics at play with a photovoltaic panel. Two examples:

  • The conversion of solar radiation into electricity.
  • The constant gravitational downward pull on prices.

Actually, scratch that last one. After several years of a steady and often free fall decline that has squeezed industry profits and led to a raft of bankruptcies , prices rose last month.

At least that was the case in Europe, which imports many of its panels from China.

"The average selling price for Chinese crystalline silicon PV modules shipped to the European Union increased by 4 percent in March, the first monthly rise since January 2009," market research firm IHS iSuppli says in a press release. "Prices are set to rise by another 1 percent in April and by an average of 4 percent during the next three months."

IHS attributed the climb to "a number of factors" including booming demand in China and Japan, which helped eliminate oversupply. It also cited the European Union's anti-dumping complaints against China. The EU has proposed tariffs on Chinese product but has not yet implemented them, as the U.S. has.

This could be a catch-22 for the solar industry. Vendors of solar gear might appreciate the potential relief to their balance sheets. But that relief might never come if consumers who are accustomed to falling prices decide that panels are now too expensive.

Photo of Jonathan Borofsky's Berlin Molecule Man sculpture by Hanson59 via Wikimedia.

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This post was originally published on Smartplanet.com

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