China solar panel makers plan to reduce prices

In the face of higher polysilicon prices, 88 per cent of China solar panel manufacturers plan to lower or keep prices intact to win market share. This is according to Global Sources' China Sourcing Report: Solar Panels. Only 12 per cent plan to increase prices.

"With the polysilicon shortage expected to continue until 2009, most manufacturers are implementing measures to streamline production," said Spenser Au, publisher of China Sourcing Report. "These include expanding to gain economies of scale, backward integration and R&D to produce thinner solar cells that require less polysilicon."

Apart from lowering production costs, China solar panel suppliers are looking for ways to reduce waste (28 per cent); increasing automation (27 per cent) and; upgrading management systems (25 per cent). Others (20 per cent) will focus on vertical integration and decreasing defects to step up manufacturing efficiency.

As for concerns for the next 12 months, majority (60 per cent) of China suppliers cited price competition. Others noted raw material costs (25 per cent), stricter overseas standards (7 per cent), design copying (5 per cent) and labour shortages (3 per cent).

"Manufacturers are generally optimistic, with 97 per cent expecting exports to increase over the next 12 months," said Au. "However, with excess capacity in the high double-digits, a larger number of suppliers are reducing prices to gain orders."