Price now set at 0.53 Euros/Watt

China has basically eaten up the global solar industry because of its low cost of production. The big daddies of the solar industry have all gone bankrupt or are on the verge of dying. Europe which was the major solar country back in 2010-11 initiated investigations against solar panel imports from China. China was dependent on European exports initially, as there was no national feed in tariff policy in China. But the tables were turned when solar feed in tariffs became attractive with the very low prices of solar installations in China. China became the biggest threat globally. USA initiated the most talked about anti-dumping case against China, which was followed by many countries. Europe too came up first with an 11.8% provisional duty against solar panel imports from China. This was followed by EU-China pact which settled at an agreement, in which China will be allowed to export 7 GW of solar panels at a minimum price of 56 eurocents/watt.

The European solar industry has also benefited from the cheap Chinese solar panel imports, which helps in lowering the overall installation cost of solar systems. Now this set price of 56 eurocents/watt is set to be reduced to 53 eurocents/watt. Many industry experts had seen this coming as many non-Chinese manufacturers also resorted to exporting solar modules at a price lower than the set minimum floor price. This will lead to China being at an competitive disadvantage. China is set to become the biggest solar manufacturer in 2014, accounting for almost one-third of the total global demand.

Implications of the Floor price decline for EU-China

I think China will not be affected too much by this little price decline, since the prices are actually getting lower and lower each day. However this may be a good sign in terms of demand in Europe, which could witness an increase in demand since the prices have gone down now. 2014 is going to be a crucial year in the history of solar industry and it remains to be seen how each country will play their game.