Greencon clients often complain about the cost of Photovoltaic cells. The price of these is only worsened by the fact that we cant tie our pv to the national grid. The good news is that it looks like the price of PV will be comming down in the future. Read this article by James Murray,

The price of solar panels could fall by as much as 40 per cent by the end of the year as huge increases in polysilicon supplies lead to a sizable fall in production costs for solar panel manufacturers.

That is the view of industry analyst New Energy Finance, which is predicting solar module prices could fall by between 30 and 40 per cent as a result of recent investments globally to increase production of silicon.

Polysilicon prices hit a peak of $400 per kilogram last summer, but as investments to increase capacity have come online, prices have fallen to between $30 and $40 per kilogram and experts are agreed they are likely to continue dropping.

“A massive increase in silicon supplies is coming through at the moment that will lead to a fall in solar module prices,” predicted Angus McCrone, chief editor at New Energy Finance. “In one way it’s bad news for solar companies because it will put pressure on margins as prices fall, but in another way it will trigger lots more demand from both large solar project developers and consumers as well as from businesses installing rooftop panels.”

The predictions come as a consortium of China-based solar firms called on the Chinese government to lower the allowance it offers by 75 per cent. The companies said that with the industry benefiting from falling polysilicon and production costs the government should cut the incentives it offers in an attempt to encourage officials to authorise more large-scale solar projects.

Underlining this bullish outlook, China-based solar panel manufacturer Suntech Power Holdings announced an upbeat outlook for the year, estimating that demand from the US could reach 700MW during 2009 as a result of President Obama’s new stimulus package, and confirmed it was on track to begin shipping thin film panels in the second half of the year.

The company’s confidence that demand throughout 2009 would continue to expand was echoed by a raft of other developers last week as Sun Well Solar announced it completed its first 40MW thin film solar cell production line ahead of schedule, and T-Solar confirmed it had begun volume production of what it claims is the world’s largest PV panels at its factory in Spain.

Moreover, US solar panel installation specialist Borrego Solar Systems announced it was to expand its commercial and government sales and installation business in a move that has also seen it sell its residential arm to Vermont-based groSolar.

However, the outlook for the industry is not entirely rosy with Suntech’s share price slipping two per cent following the release of results showing it posted a net loss of $65.9m during the fourth quarter, while seeing revenue climb just four per cent year-on-year to $414.4m.

Analyst ThinkEquity Partners downgraded the company’s stock, citing fears that tightening capital conditions and weak demand from Europe would impact overall demand, while any boost from Obama’s stimulus package would take time to be felt.

McCrone said that SunTech and other solar firms were being impacted by wider stock market concerns. “There are concerns about financing and falling margins for some solar companies, but you also have to remember we are in a bear market, so companies are not getting much reward even when they come up with pretty good results.”

There were also the first signs that falling polysilicon prices will eventually level off after Chinese polysilicon wafer manufacturer LDK Solar announced it was delaying plans for a new factory until 2010, as a result of plummeting prices. The company also reduced its fourth quarter earning estimates and announced the decline in prices means it is now planning to take an inventory write-down of $210m to $220m.

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