Why solar panels prices are decreasing?

We often think that “Why are the prices of solar panels decreasing?”. At the moment, the prices of solar panels in the Chinese and global markets have fallen to a record during the last few months. The prices of Longi solar panel price in Pakistan have reached the lowest level in their history. (Mono Perc or P-Type) the average price will reach 0.151 per watt, i.e., about 45 rupees per watt.

Why are the prices of solar panels decreasing?

The simple answer to the question of what is causing this record drop in solar panel prices is the supply and demand gap. During the last year, the production capacity of the companies making solar panels (Solar Modules) and their raw materials (Raw Materials) has increased a lot in China, and new companies have also come into the field. On the other hand, there has been a significant decrease in the import of solar panels, especially in the import of solar panels from European countries. Almost all of Europe’s imports come from China, with about 60 percent of China’s total solar panel exports going to Europe. Oil and gas prices spiked last year due to the war between Russia and Ukraine, and Europe began importing solar panels in a bid to reduce dependence on oil and gas.

On the other hand, due to the lack of labor and regulatory factors, not so much installation could be done. Now, the current situation is that due to indiscriminate import in Europe and (Production) in China (Warehouses) are full of solar panels. There are new productions are also coming from behind. Due to this, the price of the panels has been reduced to a record. 

For this reason, many importers around the world are deliberately not importing panels due to the expectation of further reduction in panel prices.

 The primary reason for the record drop in solar panel prices

The reason for record drop in solar panel prices is that many (manufacturing companies) especially European companies, are close to bankruptcy because they are not able to compete with Chinese companies due to low prices.

Because the production cost of solar panels in Europe is higher than in China, and for this reason, in the future, Europe may ban the import of solar panels from China or impose heavy taxes and duties on them. On the other hand, the conditions of Chinese companies are not so good, but Chinese companies are definitely getting help from the Chinese government.

Future Prediction

From this whole situation, it can be concluded that the prices of solar panels will further decrease during the next year, and if there is an increase, it will be minor. It means that people will get cheap solar panels because more than 80% of the world’s panels are made in China,or solar power in china. How much the rest of the Pakistanis will get solar panels depends on the import conditions and the profit greed of the solar importer.