Sales of solar panels expected to surge as prices drop.

There is a large surplus of solar panels waiting to be bought. The surplus has brought prices down to what are being called unsustainable levels. Environmentalists will no doubt be happy to see more units being shipped.

Suntech Power Holdings (STP) predicts shipments to be up 19 per cent from 2011. Suntech is the worlds largest producer of solar panels.

The Canadian Solar Inc. (CSIQ) claims that shipments will increase as much as 51 percent. Many companies however are struggling to make any profit at all because of a dramatic fall in prices.

Last year prices fell by a whopping fifty per cent. As a result profit margins on average have fallen by almost a half as well. Jinko Solar Holding (JKS) reported a negative gross margin of 4.4 per cent in 2011 compared to plus 29percent in 2010.

The Suntech CEO Zhengrong Shi said:"The challenge is profitability," "Excess capacity in the global industry has pushed the international solar companies to sell at unsustainable pricing levels in an effort generate cash and maintain viability." Chinese demand is growing by leaps and bounds as installations there are expected to double this year according to Shi. Suntech based in China suffered a loss last year. For more see this article.


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