Why Solar Panel Prices Are Decreasing?

Why Solar Panel Prices Are Decreasing?

Why Solar Panel Prices Are Decreasing In Pakistan Market
PAKISTAN SOLAR MARKET

In recent months, solar panel prices have hit record lows globally, including in China and Pakistan. In Pakistan, Longi solar panels (Mono PERC or P-Type) now cost 0.075 cents per watt (about 20 PKR per watt), while n-type TOPCon panels in China are priced at 0.085 cents per watt

Why Solar Panel Prices Are Decreasing In Pakistan Market

The main reason for this price drop is the imbalance between supply and demand. Increased production in China and reduced imports in Europe have led to an oversupply, pushing prices down.

1. Supply and Demand Gap

The primary factor behind the sharp decrease in solar panel prices is the widening gap between supply and demand. Over the past year, China’s solar panel manufacturing capacity has surged as more companies entered the market. The production of both solar modules and the raw materials needed for their construction has increased considerably, contributing to a surplus. However, demand, especially from European countries, has dropped sharply. Due to high oil and gas prices last year, driven by the Russia-Ukraine conflict, Europe significantly ramped up solar panel imports to reduce reliance on fossil fuels. Now, with warehouses full of panels and new production ongoing, the oversupply has forced prices to drop.

2. Global Import and Market Factors

Europe is a key market for Chinese solar panel exports, accounting for around 60% of China’s total solar exports. However, as imports in Europe have slowed down due to various factors like labor shortages and regulatory challenges, European companies have struggled to install solar panels at the same rate. This situation has led to overstocked warehouses, which further pressures prices downward. Many importers are even holding off on purchasing panels, anticipating future price reductions.

3. Cost Competitiveness Between China and Europe

Another significant reason for the record price drop is the fierce competition between Chinese and European solar manufacturers. European companies, which face higher production costs, find it challenging to compete with China’s lower-priced solar panels. As a result, many European manufacturers are nearing bankruptcy. In response, there is speculation that Europe may introduce tariffs or other restrictions on Chinese solar imports to protect its domestic industry. While Chinese companies are also facing challenges, they are receiving support from the Chinese government, which helps them maintain competitiveness.

4. Future Outlook

Given the current market conditions, solar panel prices are expected to continue decreasing throughout the next year. If prices do rise, the increase is likely to be minimal. As over 80% of the world’s solar panels are produced in China, the global market will benefit from lower prices, but the final cost for consumers in countries like Pakistan will depend on import regulations and the profit margins set by local importers.


In summary, the combination of increased production capacity, lower demand from key markets, and global competition has driven solar panel prices to record lows. This trend is expected to continue, offering consumers the opportunity to purchase more affordable solar energy solutions.

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