Trend Analysis on Solar PV Module Prices

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With rising solar photovoltaic based power development across the globe, there is more competition in the PV industry as manufacturing segment and downfall of various cost component that results in better deployment for solar manufacturing and price cut. Module Pricing Note describes the change in the pricing trends of the solar photovoltaic modules in various region i.e. Germany, East Asia, South east Asia, North East Asia as these market are highly demand oriented. In this analysis note solar PV module cost (INR/Wp) has been covered as Indian Solar Industry is moving with CAGR of 95.60% YoY since 2010 and expected to grow at the rate of 61.67%  YoY in next 6 year. Presently, In solar industry, the most important thing which decides Cost-Benefit ratio of the project is the price of Modules. Instead there are so many other factors also, but the present focus is on modules since the cost of solar cells fluctuates at very higher rate as per the market or demand. The change in $ (share prices) value also effects the INR values and 85-88% of the installation are based on the imports from the off shore companies.

1Figure 1-Solar PV Installation Capacity

The global solar PV installation capacity can be seen in Figure-1. Increased demand in energy resulted in increased installation of solar PV systems. The solar PV installation expected to reach 430 GW capacity by 2017 due to increased energy demand due to increased competition in solar market. Hence, to acquire market, the distributors squeezes the solar module prices.

Solar PV System price trend

From past few year, the total cost of solar PV system pricing has declined by about 70%. The high energy Demands and Utility leads to change in the price trend. The cost of solar PV system depends on various factors which are responsible for the ups and downs of the solar PV market. The solar PV system costs are categorized as hardware cost, soft costs and other costs.

The hardware category includes modules, inverters, racking, and all balance-of-system (BOS) hardware required for a complete system.


Figure 2-Solar PV System Cost Drivers

The soft costs-other category includes labor costs, installation cost and development costs in the commercial- and utility-scale PV systems. Below Figure-3 shows the core cost drivers of PV solar system.


Figure 3-Solar PV System Price (Source: NREL)

From the Figure- 3, we can clearly conclude that the main driving factor in cost of project for solar PV system is Solar Modules. The averaged data has been taken from NREL for Q1 2015. Since, differences across Country and Region depends on sales tax on equipment as well as variations in labor rates and share market.


Figure 4-Commercial Solar PV Installation Price Trend (Source: NREL)

From Figure-4, we can observe that there has been drastic drop in overall cost of solar PV system in last few year. There is key market developments since declines includes inverter prices, sharp declines in module prices, Installation labor costs, Balance of System (cable wires- Ac/Dc, battery etc. ). With maximum CAGR of 20%, the module prices expected to decline to about 30 Cents/Wp in 2018 from 260 Cents/Wp in 2009. The average has been taken on global basis from NREL source since region to region tax varies, labor cost varies and module cost varies. This concludes that module prices are the key factor in deciding the cost of solar PV system.

Module price trend

From the above findings, it is observed that module price fluctuates at very higher rate week to week due to ups-downs in market prices and demand and final end prices based on the mutual negotiation, shrink in profit of module manufacture, market acquisition stress. Start from manufacturing, silver is used as conducting path in solar cells. This also fluctuates time to time. Also the change in share prices ($ value) effects the INR value, The Indian economy. Considering the above fluctuating factors, analysis has been done to estimate future cell’s prices. The major solar PV manufacturer Countries that participate in importing modules are shown region wise in Figure 6. In 2014 Chinese suppliers dominated the solar module market globally. Chinese module makers continue to lead rankings, because China is the largest global market, and it is closed to foreign suppliers.

The Benchmark cost of the modules is shown in Table -1. The cost of the modules are expressed in percentage of the total cost of project. The trend shows decrease in module prices by 0.5%.

Year 2015-2016 2014-2015 2013-2014 2012-2013
PV Module Cost (Lacs) 332.35 333.80 335.71 344.50

[ Source – Ezysolare Blog : Benchmark Capital Cost Of Solar PV Project 2016-2017 ]

Table -1: Benchmark Module Cost (Lacs for 1 MW)


Figure 5- Ranking of Top 8 Solar PV module suppliers in 2015 (Source:

Change in Module Price Trend Due to Demand

Regions like North America (Canada), North-East Asia (China), East Asia (Japan), South-East Asia (Taiwan), European region (Germany), United States etc. are the key players in solar cell manufacturing.  Module Price Trend has been declined with the increase in demand and increased Solar PV installation capacity shown in Figure 6.


Figure 6- Module Price vs. Solar PV Installation

Considering the historical module price trend, prediction for Year 2016 (Q2, Q3 and Q3) has been done using Cumulative Annual Growth Ratio (CAGR) for different regions.


Figure 7-Region-Wise Module Price Trend (Source: www.pvxchange)


Figure 8- Region-Wise Module Price Trend

The module price trend observed in South-East Asia is Rs 30.50/Wp, for European region is Rs 37.87/Wp and for East Asia is Rs 36.60/Wp for the Q2 and Q3.

From the Figure-7 & 8, annual cost analysis and prediction using CAGR has been done. The module prices shown in Figure 7 are in Cents/Wp & in Figure 8 they are in INR/Wp. Both the figures compares the effect of $ variation in INR value which effects Indian economy. The prices of modules in South-East Countries (like Taiwan) ranges from Rs 30/Wp to Rs 32/Wp which is the lowest price range in the present trend. Similarly, Japan costs about Rs 40/Wp to Rs 45/Wp. While China and Germany maintaining average price of Rs 35/Wp with standard variation of 1.5.

Also, the module price prediction shows that during Q2, Q3 and Q4 of the Year 2016, Solar modules from China varies between Rs 35/Wp to Rs 33/Wp, Chinese Solar Modules maintains costs at Rs 35/Wp, modules from German may go down from Rs 38/Wp to Rs 35/Wp. But, Japan with CAGR of 5% shows module price reduction upto Rs 38/Wp. The prediction completely depends on demand values. The prices of the modules depends on the demand of the market. With the help of generated data, it has been analyzed for the Year 2016 that the prices of different Regions varies for the on Quarterly basis shown in Figure 9. We can observe that, module prices are reducing in Germany from 1st Quarter to 2nd, for China prices are reducing for 1st quarter by 1.8 % whereas almost stable by 0.02% for the 3rd and 4th Quarter, for Japan, prices can reduce by 3.4 % whereas very less change upto 0.3% for the other quarters. The trend shows that for the end of Year- 2016, price of South-East modules can reduce by 1.1% on average.


Figure 9-Module Price Change 2016 (Quarterly Basis)

The reason behind the change in solar module price trend is described below.
As shown in the Figure 7 & 8, Currently, Solar panel prices continue the downtrend this year, due to high global demand. In China, solar panel prices are facing price reduction, since solar demand is weakening. The installation in Japan and India are heading the end in March, so major solar panel buyers are now reducing their procurement sharply. The slow demand pressurizes the solar panel prices in these regions. Hence, overall solar panel prices are driven down by the global decreasing demand and the price competitions lead by Chinese module makers. As the downstream solar panel prices continue going downwards, multi-crystalline cell price is also being pressured by major Chinese buyers. Many 2nd and 3rd tier solar panel makers have to comply with aggressive price competition in order to digest the increasing stockpiles. While in the U.S. and EU, even with solid demand, the price still continues the deterioration due to the strategic pricing of Chinese module makers on speculations to increase their market shares in these regions in order to balance the weakness of demand in domestic China.

In India and the other emerging countries, the prices are also under pressure despite the steady demand, because many solar panel makers are leveraging price competition in order to compete for projects in the second half of the year. Similarly, the analysis has been done for the European regions as they maintains stable prices in the PV market.


Figure 10- Module Pricing Trend (European Region for C-Si)

From the Fig-10, it has concluded that the prices of modules are continuously reducing. The fact behind reduced prices are increasing Energy Demand. The analysis has been done on quarterly basis (Q1, Q2, Q3, and Q4) to see the demand and supply ratio to modules. Figure 11 shows the change in price trend of modules on quarterly basis.


Figure 11-Change in Price Trend Annually

From the Figure 11, we can see that the maximum price change observed is 6.28% from Q1 to Q2 in Year 2014. One of the reason this this big % change is market demand. For the Year 2014, no change in module prices founds, in fact there was increased module prices found in Q4 with %change of 1.7%. On the basis of CAGR, average estimation is done for Year (2016-2019). All the analysis is done for Germany Crystalline modules only for Figure 12, which shows module price reaches 41 Cents/Wp.

   10Figure 12- Average Module Predicted Price

Change in Silica Price Trend

On the other, second factor that affects the module prices is fluctuations in PV is Silica metal shares. From the Figure 13, variation in Silica price trend can be seen for past few years. The demand for silica for the manufacture of solar panels is forecasted to be higher which increases the demand and Solar PV installation. The fluctuations in Silica prices leads to the variation in solar module prices.


Figure 13- Silica Price Trend (Cents/kg) (Source:


From the above analysis and future module price trends, we can predict the demand and supply pressure on the manufacturers. Hence, can estimate the change in price trend of the solar PV modules. Many factors influences the change in price including Country’s present economy, demand, tax, variation in cost of cell materials like Silver  etc.. The module price trend help in planning and strategy formation to supply as per the demand. The demand projections in (MW) are forecasted quarterly basis for the year 2016 in India.  This increased demand increase the completion in the Indian market which helps us to gain clients by three times.

Forecasted Demand Projection in India (2016)

Figure 15-Forecasted Demand Projection in India (2016)

Hence, as per the required demand, the modules purchase and supply can be decided in efficient and in optimized way.

Based on the current demand and market growth scenario, we are expecting that the solar pv module prices going to fall further with the rate of 5-6% annually. The other reason might be stress on the various reputed tier 1 supplier to compete with other repute supplier, comfort in lower margin.


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