The plummeting prices of solar panels, which have severely impacted profits across the sector, seem to have reached their floor, according to the chairmen of two major firms in the solar industry.
In a joint presentation hosted by the Shanghai Stock Exchange, Jinko Solar Co. Chairman Li Xiande labelled the current downturn as “irrational,” expressing that there’s only a slim chance the decline will continue.
Li, alongside executives from other firms such as Trina Solar Co. and CSI Solar Co., addressed written questions from investors during Tuesday’s event.
The presentation identified that a surge in new factories designed to capitalise on a growing market has been identified as the cause of the downturn, having come online in 2023.
However, rather than meeting anticipated demand, this influx of supply has overwhelmed the market, leading to record-low solar panel prices and declining margins.
During the presentation, Trina Chairman Gao Jifan echoed similar sentiments, stating, “The price of photovoltaic modules is currently at a low level, and there’s limited room for further decline.”
The data
According to BloombergNEF data, solar module prices have declined to approximately half of their March 2023 levels. China, the world’s largest solar market, is grappling with grid constraints that could potentially hinder new installations.
March saw a 32% decrease in installations compared to the previous year, as reported by the National Energy Administration.
Despite these challenges, Jinko remains optimistic about the global demand for panels, forecasting a 20% increase this year, which could help stabilise the market.
The company has already ramped up its production schedule in the second quarter compared to the first and is operating its most advanced production lines at full capacity, according to Li.
