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One of many fascinating notes within the not too long ago printed US Photo voltaic Market Perception report is that the typical international photo voltaic module worth within the third quarter of 2023 was down 30–40% from the typical international photo voltaic module worth within the 1st quarter of 2023. That is primarily on account of provide–demand imbalances in China. The US market will get virtually no photo voltaic panels from China on account of tariffs and the Uyghur Compelled Labor Prevention Act (UFLPA), with these Chinese language photo voltaic panels accounting for simply 0.1% of US photo voltaic module imports. Nonetheless, these international tendencies have had notable ripple results on US photo voltaic module costs, which have been down 15% in Q3 2023 in comparison with Q1 2023.

“Nonetheless, it’s vital to acknowledge the variations in photo voltaic module provide dynamics between the US and the remainder of the world. Different international areas are at the moment in a state of module oversupply. As China continues its large growth of producing capability throughout the complete photo voltaic worth chain, there was vital downward strain on international module pricing. The impacts of this oversupply state of affairs have escalated not too long ago, with stories of spot module costs outdoors of the US as little as 14-15 cents/watt,” the report states.

“Against this, the US market is considerably insulated from these pricing dynamics. Lower than 0.1% of US module imports this yr have come from China on account of a mixture of tariffs (anti-dumping and countervailing duties [AD/CVD], Part 201, and Part 301). Virtually 80% of modules for the utility-scale market come from Southeast Asia. And whereas Southeast Asia is usually a low-cost area for module manufacturing, producers are nonetheless uncovered to the restrictions on polysilicon sourcing from China as a result of Uyghur Compelled Labor Prevention Act (UFLPA).

“Consequently, module provide to the US utility-scale sector continues to be tighter than different international areas. Demand for modules from prime tier 1 producers is excessive. This has stored US module pricing considerably above worth factors in different international locations, even with out anticircumvention tariffs (for extra on photo voltaic part pricing, see Wooden Mackenzie’s PV Pulse). On steadiness, availability of modules for the US utility-scale market continues to be constrained however has improved considerably this yr. After all, module availability will proceed to enhance as extra home manufacturing comes on-line.”

What’s shocking and a bit loopy is that the utility-scale solar energy market is having far more bother now getting different elements. Photo voltaic module provides have began flowing fairly nicely, however the business has to attend a very long time for different varieties of electrical gear. The end result, naturally, can also be rising costs. “Transformer availability has develop into a widespread drawback, with wait occasions extending previous 2 years in some circumstances. Excessive-voltage circuit breaker lead occasions have almost doubled within the final yr to a mean of 100 weeks (see Wooden Mackenzie’s report H2 2023 US photo voltaic PV system pricing). This has already elevated steadiness of system (BOS) pricing for utility-scale photo voltaic. With no indicators of this development reversing, we count on electrical gear availability to be considered one of a number of elements slowing utility-scale photo voltaic development within the subsequent a number of years.”

If we break it down by sector (chart above), we see that residential solar energy system pricing was up 3%, business solar energy system pricing was down 2%, and utility-scale solar energy system pricing was up 5% (single-axis trackers) to six% (fixed-tilt programs).

Listed here are extra particulars on how the pricing for these completely different segments was cut up out by part: “Module costs declined 12% for the residential and 6% for the business phase year-over-year. The utility phase continues to see elevated module pricing as a result of one-year lag in module procurement mirrored in our pricing knowledge. For distributed photo voltaic, the decline in module prices has been offset by a rise within the steadiness of apparatus in addition to tender prices. Throughout the 4 completely different market segments, labor and engineering prices have elevated anyplace from 5-25%. Tools part prices have additionally been rising over the previous few quarters as a result of rise in inflation. Nationwide PV system costs are up throughout all segments apart from the business phase, which witnessed a drop of two% yr over yr.”

We’ll see what occurs in This autumn and in 2024, but it surely’s clear there are a selection of things influencing pricing, together with variations between the market segments. It’s exhausting to know the way a lot will change within the coming months, because the financial and political conditions feels a bit up within the air and inclined to sturdy shifts within the tendencies. We will see.