The amount of sun’s energy falls on planet earth per hour is equivalent to the energy, the entire population of the world consumes in an hour. Meaning, it can suffice the global energy need for free as we get it from the sun for free. The purpose of establishing solar panel is to detain global temperature growth to 2 degree Celsius. But, to reach the target, the sector needs more investment. The high investment will decrement the price lower than fossil fuel price. And people will start using solar panel. Good news is, about a decade ago cost to generate per MWh was $600. Interestingly, the price decreased to $100 per MWh. Nonetheless, the price reduction failed to increase the demand for solar panels. Consequently, the price fall of solar panels causes the industry to pass a long dark time.
Solar market condition now
Solar manufacturers, Trina Solar LTD., and others are probably selling their products at the loss as Bloomberg reported. Moreover, the long dark night is not over yet. This week price fell to a record low. Jeffrey Osborne, an analyst Cowen & Co. wrote to Bloomberg that “certainly it would be a challenge for anyone to make money at that price”.
Reason for low Price
There are multiple reasons behind the drop in the price. Global giant solar manufacturers like Trina Solar, Canadian Solar, JinkoSolar and else are ramping up their production capacity. As a result, the price of the solar products is plunging. Moreover, demand is not responding to the supply. In fact, since, the cost goes down fast supply increases. Yet, Donald Trump’s win in the presidential election elongated the spoiled transition perhaps.
Denying low demand companies are continuously expanding production and supply capacity which will decrease the price further. On the same token, Canadian Solar which comes after Trina Solar Ltd as second biggest supplier aims to lessen the cost to 27 cents a watt by the end of 2017. All in all, people familiar with the industry are extrapolating that price will remain low next year too.