Falling Solar Panel Prices Hit U.S. Solar Development

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Researched by Industrial Info Resources (Sugar Land, Texas)--Solar panel prices have dropped more than 50% in the last year, according to the U.S. Department of Commerce, and imports of Chinese-made solar cells nearly quadrupled from $639 million in 2009 to $3.1 billion in 2011. The impact of this increase in supply and drop in price are being felt in the U.S. with company closures and delays in development and manufacturing. Two prominent examples of this are the closure of Abound Solar Incorporated (Loveland, Colorado) and the 18-month-minimum delay GE Energy (NYSE:GE) (Fairfield, Connecticut) announced for the planned opening of a solar panel manufacturing plant in Colorado.

Industrial Info is tracking 241 new solar power build projects in the U.S. and Canada, totaling 10,013 MW, with start dates between July 2012 and the end of 2014.

Click on the image at the right for a graph detailing new projects by region.

Both are casualties of the drop in panel prices. Abound Solar had attracted $300 million in investment from private sources and a $400 million federal loan guarantee in December 2010, but filed for bankruptcy under Chapter 7 for liquidation of its assets on July 2, 2012. "With over $30 billion in reported government subsidies, Chinese panel makers were able to sell below cost and put Abound out of business before we were big enough to pose a real competitive threat to China's rapidly growing market share," former CEO Craig Witsoe said.

Nine months ago, GE Energy had announced the start of construction of its solar panel factory, but backpedalled two weeks ago, saying that the plant's construction was going to be indefinitely suspended, causing a delay of at least 18 months. Danielle Merfeld, GE's general manager of solar technologies, said the group had been forced to delay the start of production because of the plunging price of solar panels. And the reason for this plunging price? Sales of solar panels grew to a capacity of 31,000 MW this year from 24,000 MW last year, but global supply stands at about 60,000 MW.

However, this is not all bad news. Falling prices will be good for consumers in the long term, and the U.S. market is likely to be home to a lot of new solar developments in the coming years. According to The Solar Energy Industries Association, "Solar is one of the fastest-growing industries in the United States, employing more than 100,000 Americans across all 50 states. In fact, a report released just two weeks ago shows the U.S. solar market grew 85% in the last year." The group also notes that 59 new solar manufacturing facilities have begun operations in the U.S.

For more information, see June 21, 2012, articles - Basic Optimism for Solar Power Mixed with Consumer Cost Confusion, Survey Says and Texas Can Lower Prices and Plug Power Gaps with Solar, Says Energy Foundation Report, and July 17, 2012, article - U.S. Banks to Finance Billions in Renewable Energy Projects.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, and eight offices outside of North America, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.