Recent reports from OPIS, a Dow Jones company, have indicated a significant decrease in solar cell prices, reaching a historic low. This trend is primarily attributed to a decrease in demand, leading to intense price competition among cell manufacturers.

The data shows that the prices of Mono Perc M10 and G12 solar cells have plummeted to their lowest levels ever, as quoted at $0.0603 per W and $0.0645/W FOB China, respectively. This marks a consistent decline over four consecutive weeks. The price of M10 TOPCon cells also decreased, reaching $0.0690/W. These prices reflect a broader trend in the solar industry where the entire supply chain, especially in China, is experiencing a downturn in prices due to weak demand in both domestic and key export markets.

This scenario has put pressure on cell manufacturers to engage in a price war, as they strive to stimulate demand and increase sales volumes. The ongoing competition has led to the adoption of various strategies by manufacturers, such as purchasing lower-quality wafers and outsourcing production to original equipment manufacturers (OEMs) to reduce production costs. However, these measures have raised concerns about the potential impact on the quality of solar modules in 2024.

The industry also faces challenges with production costs. Tier-1 cell manufacturers have a cash cost of approximately CNY0.48/W for producing Mono Perc M10 cells, based on current upstream materials’ prices. In contrast, Tier-2 suppliers are struggling with higher production costs, leading to losses on sales.

In response to these challenges, cell producers are focusing on reducing their inventory by lowering operating rates, with the average operating rate for cells currently between 70% and 80%. However, there seems to be no effective approach to correcting the situation at the moment, and it's anticipated that wafer and cell makers’ operating rates will continue to decline.

This decrease in solar cell prices, while indicative of challenges in the solar industry, also opens up opportunities for increased adoption of solar technology due to lower costs. However, the balance between maintaining quality and reducing prices remains a critical concern for the industry moving forward.