Solar Panel Price Drop Slowing Amid Steeper Subsidy Cuts

The pace at which prices of solar panels are falling will slow this year amid steeper subsidy cuts in Germany, the world’s biggest market for the industry, Solarworld AG Chief Executive Officer Frank Asbeck said today.

Asbeck predicts module prices will drop 13 percent on average in 2012, less than half the level of Germany’s expected solar subsidy cuts.

“Last year module prices fell steeper than subsidies in Germany, this year it will be the other way around,” Asbeck said today in a phone interview.

Officials from the German solar industry, which has struggled with foreign competition including from China, will meet German Environment Minister Norbert Roettgen in Berlin today. Talks will focus on possible adjustments to subsidies after the country installed 7.5 gigawatts of panels last year, more than double the government’s target, Roettgen said yesterday.

The industry will put forward several proposals at the meeting, Asbeck said, without elaborating. Officials will propose smaller subsidy cuts instead of two larger ones to reduce installations, the Financial Times Deutschland reported today, citing unidentified company officials.

“This year will not see such steep cost reductions of photovoltaic modules, as the wholesale price of $1 per watt cannot be met by many producers without them losing money, and they’re doing so already,” Martin Simonek, an analyst for Bloomberg New Energy Finance, said by e-mail.

Germany is expected to cut subsidies by 15 percent in July after a 15 percent cut took effect at the start of the year. Panel prices dropped about 50 percent last year, according to data compiled by Bloomberg, amid a 13 percent subsidy reduction in Germany in that period.

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