Will the Panel Price Bump be a Q3 Solar Deal Breaker?

16 May 2014

Solar panel prices are trending up.

Solar panel prices are trending up.

Panel prices are trending up. Depending on module make, model, and the order size, the increase looks to be somewhere to the tune of 6-8 cents per watt, or a cost of 70-75 cents per watt for projects that will be built in Q3 of 2014.

The price bump may be attributed to the U.S.-China trade dispute, which has yet to be resolved. The continued delay in the international trade tariff decision has created urgency for panel suppliers to move modules, leading to material price increases. The price bump may also be the result of some module suppliers using the dispute to raise prices. If module tariffs related to the trade dispute do indeed move forward, the solar panel price surge could kill many solar deals.  Although the module price bump is impacting near-term solar projects, we see it as a temporary spike.

In the meantime, we have advised our developer clients to address rising module costs in a number of ways. To start, we would not advise developers to include another 10 cent/W cost into their projects as this could kill many deals. Alternatively, developers with deeper pockets may consider warehousing modules. Developers might also reconsider the value of the product they are buying, including factors such as module efficiency, temperature coefficients, low light performance, and performance guarantees. These factors may indirectly add value to a project. Developers should also consider optimizing other portions of the solar energy system such as site configuration, higher efficiency inverters, trackers, and 1000V systems. Our team is happy to help developer clients address these hurdles to improve the likelihood that a given project will attract investment. To speak to a team member, please reach out at finance@solsystemscompany.com or 888-235-1538 x2.

View this blog on Renewable Energy World.

About Sol Systems

Sol Systems is a renewable energy finance firm that provides secure, sustainable investment opportunities to investor clients, and sophisticated project financing solutions to developers.  Founded in 2008, Sol Systems focuses on meeting the industry’s most critical solar financing needs, including tax structured investments, capital placement, debt financing, and SREC portfolio management. To date, the company has facilitated financing for thousands of distributed generation solar projects and hundreds of millions in investment on behalf of Fortune 100 corporations, utilities, banks, family offices, and individuals. For more information, please visit www.solsystemscompany.com.

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Sara Rafalson

Sara Rafalson