Germany today announced cuts in the feed in tariff for solar power systems of 15%. This news will likely put further pressure on solar stocks, already beaten up by the challenge of balancing supply and demand in a market with such uncertainty.
With the american ITC program about to change, many american projects are in a holding pattern pending the new year. This german news will only exacerbate an industry already challenged by serious imbalance in supply and demand, and we can expect that prices will reduce further before they go back up again.
Companies such as Sunlogics and other makers of lower efficiency panels will be well advised to put any production increases on hold for the moment. With the market for 15% panels hovering at just under a $1 per watt, there is much less incentive to go to lower efficiency panels despite the potential price difference of $0.20 per watt, since the added cost of more balance of system components, risk and labor will more than make up for those savings, in particular for smaller rooftop applications where the amount of power generated is constrained by the space available.
Governments who are looking to increase employment might also be well advised to put funding programs on a holding pattern and certainly ensure the long term viability of any producer’s plans and resources before dishing out grants and subsidies in the “hope” of saving or creating jobs. Its going to be interesting to see how all of this trickles down the food chain to the installed cost per watt in Q1 2012…
So this solar blog writer is predicting a $2.00-2.50 solar farm cost by Q1 2012 (if not sooner), with commercial rooftops topping up at $2.75-3.00 range, and residential possibly dipping below $3.50…
Sass