will we have a dividend this year?, page-9

kpool, just type/copy the post number into the Quick Search box at top left of your HotCopper page and you will bring up the post.

The argument is simply that the market will not tolerate an excessive profit margin on PV modules that get progressively cheaper. The end effect of market resistance and wholesaler competition is that the profit margin as a percentage of product price stays about the same; if modules get cheaper to make, their selling price at all points in the marketing chain drops to keep the profit fraction of each set of hands on the way through to final owner at about the same percentage amount. If the modules are cheaper then the $$$$ of profit in wholesaling/installing/carting each panel will also drop even if the % profit on each transaction stays the same.

Interestingly, PVInsights http://www.pvinsights.com/ today predicted that module manufacturing costs at the factory will nearly halve from around the current $1.30/Watt to around $0.75/Watt THIS YEAR. Along with this will be an explosion of the market size, already being ramped up for with the start of construction of the world's first 3.4GigaWatt cell factory in Taiwan http://www.pv-tech.org/news/_a/report_neo_solar_power_to_build_3.4gw_pv_cell_manufacturing_plant_in_taiwan/ - that is one factory will produce half the total amount of photovoltaics installed in 2009.

Very quickly we will see PV costs going the same way as videorecorder and DVD costs.

from the CBD chat line:
http://www.renewableenergyworld.com/rea/news/article/2010/08/keeping-pace-with-cost-reduction-as-module-prices-continue-to-decline

This article, apart from being a pump for hydrogen-diffusion-stressed-fracture-cleavage of very thin crystalline silicon wafers patented by SiGen, emphasises that profit/module will have to decrease as module components get cheaper.

This was part of my argument that re-sellers (such as CBD/SOO/AFT/AIR) cannot continue to hold the current profit amounts on each installation at current levels as the price of the components going into those installations falls. Labour, warehousing, planning are just another cost like bolts and inverters and will fall.

And CBD's profit per installation will fall with them.

Interestingly, the article starts with a silicon/Watt cost of 38cents/W, in line with Solarfeen's estimate of 38cents/W in his/her post. And the article is arguing cost reductions from that number down in the near future.