Over the last five years, commercial solar PV prices have dropped by 58%, making the renewable source of solar energy more accessible to the average consumer. And with recent news from China, we know solar module prices are about to plummet once again.
Earlier this year, you might have heard about the recent tariff on solar modules and thought to yourself that now may not be a good time to invest in solar for your business, but that is simply not the case. The Chinese government recently announced an abrupt withdrawal of support for their solar PV market, which will lead to installed capacity decreasing by 30-40% this year. China has halted approvals of new subsidized utility-scale solar plants and will limit the amount of smaller-scale distributed generation installed by shrinking subsidies it provides to solar generators.
The reduction in installed capacity is expected to be around 20 gigawatts. To put this into perspective, the United States only installed 10.6 gigawatts of solar in 2017! This decision by the Chinese government is going to cause a huge global oversupply of modules. Bloomberg New Energy Finance has predicted this surplus in available modules will result in a 34% decline in multicrystalline solar module prices. This will likely completely counteract the 30% tariff implemented earlier this year and we are expecting to see the results of this in Q4 of 2018 and Q1 of 2019.
The Chinese government’s abrupt withdrawal of support for China’s solar PV industry is going to flood the global market with lower-priced solar PV modules. If you want to take advantage of these ultra-low prices while there is more supply than demand, you will need to start your planning now. To receive trusted and certified assistance, contact us today for a free quote and financial analysis.