Solar developers have submitted Feed-in Tariff (FiT) bids in the second half year and an open bidding process will be completed by mid-September. Since this is the first bids in 2H13 and it may be held only once in the second half year, many solar developers have participated in the bidding process. According to EnergyTrend, a research division of TrendForce, although the bidding was initiated to allocate a capacity of 100MW solar power, out of the 100MW that was allocated, projects worth of only 45MW have been sanctioned. Thus, the chance to win the bids is lower than 50%.
Solar developers that participated in the bidding indicate that they are determined to win the bids due to the following reasons – tax rate has continuously dropped in the second half year, capacity being allocated in the bidding has decreased, average discount rate has been revised upward significantly in the first half year, and more solar developers have participated in the bidding process. According to EnergyTrend, in order to win the bids, solar developers are generous about the discount rate. In addition, EnergyTrend estimates that the lowest discount rate for the bids may exceed more than 5% while there may be more than a few projects with discount rate above 10%. The average discount rate is likely to fall between 7%-8%.
On the other hand, due to the increased discount rate and revision on the FiT, solar developers have revised the cost for Balance of Systems (BOS) downward to maintain the lowest IRR. Price for other products, such as inverters, mounting systems, wires, and high-low pressure grid-connections has also continuously declined. Based on EnergyTrend’s investigation, inverter price has dropped to US$0.2-0.15/watt while module price remains at around NT$70,000/kw. Price for mounting systems has dropped from NT$2,500 in the beginning of 2013 to NT$2,000. Rumor has it that price for some manufacturers has even dropped below NT$2,000. Moreover, price for high-low pressure grid-connections has also declined from NT$23,000 to NT$20,000. Decreased range for other products is about 10%-20%.
Judging from the spot market’s overall performance, Chinese polysilicon price has remained at RMB135/kg-RMB140/kg with average price reaching US$16.70/kg, a 0.54% rise. For silicon wafer, both buyers and sellers still bargained over the price, thus last week’s price remained unchanged. Cell price continued to decline. Module price remained the same. However, due to the poor foundation and other technology challenges, thin-film module price has dropped again .