Suntech sees China gaining from falling solar prices

Reuters News
Posted: Sep 28, 2011 12:23 PM

WUXI, China (Reuters) - Suntech Power Holdings, the world's largest solar cell maker by capacity, expects China to benefit from falling solar prices, forecasting that the country could become the largest solar market by 2015, overtaking Germany.

In some parts of Germany and Italy - among the world's biggest solar markets - analysts say solar power could already be selling at grid parity, thanks to a recent decline in solar equipment prices, Chief Executive and Chairman Zhengrong Shi said on Wednesday.

Analysts said high inventory levels of solar modules will continue to put pressure on margins of solar panel makers for at least two more years.

"The Chinese PV sector must keep the faith, it's going to be tough," he said.

The head of the Chinese solar company forecast inventory levels of solar panels could be as high as 11 gigawatt next year and could weigh on the sector, already grappling with a massive supply glut in solar equipment.


Shi, however, said that beyond the two years, the business environment for the sector could improve, benefiting from a pick up in demand for solar energy after solar prices have bottomed.

Suntech expects the price of solar electricity to become as cheap as grid power for at least half of the world's countries by 2015,

Despite falling module prices, electricity production from photovoltaic power systems remains costly. For most markets, solar could cost four times more than conventional power, said analysts.

Rising solar cell efficiency and continued fall in solar prices could improve solar energy's chances of becoming competitive with conventional power, they said.

(Reporting by David Lin and Soo Ai Peng; Writing by Leonora Walet; Editing by Muralikumar Anantharaman)