Module Shortage? That’s So 2015.

19 Jul 2016

After a year of module shortage whispers, the market now faces an oversupply.

After a year of module shortage whispers, the market now faces an oversupply.

Oh, how quickly things can change in one year on the solar coaster. After reporting extensively on module shortage rumors throughout 2015, a funny thing has happened: we are now facing a module oversupply. Why?

  1. Decreased demand from major rest-of-world markets is creating a glut in supply. GTM Research expects a reduction of 3% – 4.5% in global demand from China alone. Europe’s solar market continues to lack growth, and the Euro is not where it once was.
  2. Our industry’s gift from the holiday season, the solar investment tax credit extension, has nullified the urgency to complete projects in 2016. With December 31, 2016 no longer the deadline for ITC eligibility, many projects originally slated to be placed in service by the end of this year have been pushed into 2017 and 2018.
  3. A certain company (you can guess) that manufactured modules – and bought modules for their own solar projects – is no longer manufacturing modules or developing projects. As a result, there remains an excess of preexisting inventory that needs to be placed into third party projects.
  4. High efficiency module monocrystalline manufacturers have turned their focus to the North American solar market, offering pricing that is highly competitive when compared to conventional polycrystalline product. This has created downward price pressure on the polycrystalline manufacturers as they are forced to reduce their prices to remain competitive.

Sol Systems has seen module prices in the low-to-mid 50 cent range for Q3 and Q4 installations, much cheaper than anticipated for 2016. Based on our analysis in the market, we expect that low prices are here to stay. Bring on the cost declines, which will enable further market opportunity and bring us closer to grid parity. For projects that we co-develop with partners, Sol Systems can often secure lower-cost modules. Give us a call.

This is an excerpt from the July edition of SOURCE: the Sol Project Finance Journal, a monthly electronic newsletter analyzing the solar industry’s latest trends based on our unique position in the solar financing space. To view the full Journal or subscribe, please e-mail


Sol Systems is a leading solar energy investment and development firm with an established reputation for integrity and reliability. The company has financed approximately 450MW of solar projects, and manages over $500 million in assets on behalf of insurance companies, utilities, banks, and Fortune 500 companies.

Sol Systems works with its corporate and institutional clients to develop customized energy procurement solutions, and to architect and deploy structured investments in the solar asset class with a dedicated team of investment professionals, lawyers, accountants, engineers, and project finance analysts.

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Sara Rafalson

Sara Rafalson