Connect with us

Renewable Energy Times

MIP impact: EU module prices to decline up to 30%, 2019 PV demand up 40%


MIP impact: EU module prices to decline up to 30%, 2019 PV demand up 40%

According to IHS Markit, on the back of the decision to end the MIP in Europe, solar module prices will decline by up to 30%, while total project system costs will be “immediately” driven down. Overall, it forecasts PV demand to grow 40% in 2019.

Many in the industry have rejoiced at the news the European Commission will end minimum import prices (MIPs) for imports of solar PV cells and modules from China, Taiwan and Malaysia, at midnight on September 3.

Josefin Berg, analyst at IHS Markit tells pv magazine that they expect module prices in Europe to decline for new contracts by as much as 30% in the coming weeks.

“For project developers and EPCs, such a cut will immediately drive down total project system costs and the corresponding LCOE and raise project margins for already contracted projects,” she says.

Last week, Taiwan-based EnergyTrend said it had observed a further reduction of solar cell prices, especially in the segment of high-efficiency mono-crystalline cells. Following the discontinuation of MIPs by the EU Commission, a new price war will entail, it said. In particular, solar cells originating from China will create direct competition with those originating from Taiwan.

Today, Berg said that the biggest impact of the decision will be to spur 40% year-on-year growth in new PV installations in Europe in 2019. “In particular the developers of large utility-scale projects under development in Southern Europe, both under government programs and with private PPAs, will benefit from the increased competition among suppliers,” she says.

In IHS Markit’s latest PV Installations Tracker, which was published in June, the analysts had already assumed, as the most-likely scenario, that the MIP would not be extended after September. “So we keep with our forecast for PV installations in Europe which is about 12 GW in 2018 and 17 GW in 2019,” says Berg.

Competition is also set to intensify for module sales to Europe. “South East Asia manufacturing capacity will lose its competitive advantage on the European market, as imports from China will increase. The only clear market left for South East Asia capacity will be the United States, and possibly India depending on the evolution on import tariffs for Chinese modules and cells,” she continues.

She couldn’t say, however, how much of U.S. or Indian demand could now be met with SE Asia modules.

Watershed moment

Long a vocal challenger of the tariffs, association SolarPower Europe has hailed the decision, calling it a “watershed moment”, and a “new solar age” for the European solar industry.

“By removing the trade duties, the European Commission has today lifted the single biggest barrier to solar growth in Europe, President, Dr Christian Westermeier said in a statement released.

CEO, James Watson added, “The trade measures have made solar much more expensive than necessary in Europe, by removing them, solar will now be cheapest form of electricity in many EU countries – this means that many more consumers and national governments will be able to invest in solar.”

He went on to say that the removal of the measures will also serve European manufacturers along the entire value chain. “This decision coupled with a strong industrial strategy as proposed through the European Commission’s Clean Energy Industrial Forum will also undoubtedly increase the amount of solar products made in Europe,” he said.

On August 24, when it became increasingly clear the MIP would end, EU ProSun, which has been equally vociferous in its fight to keep the tarfiis, stated, “Today, solar energy is already the cheapest source of electricity in Europe. It will not get cheaper if the current anti-dumping measures expire. It will only be that importers’ margins will increase a little. But, the damage to the manufacturing industry – and indeed the whole value chain – will be devastating.”

Source PV Magazine

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

More in Solar


September 2018
« Aug   Oct »


Subscribe to notifications
To Top
%d bloggers like this: