Photovoltaic (PV) prices fall 30% in January 2024

Excess production capacity in China drove down prices at the beginning of the year. Residential and commercial photovoltaic systems began the year with a drop in prices, driven largely by excess production capacity from China, a study by consulting firm Greener shows.
In January 2024, the reduction reached 30% compared to the same period in 2023. Cheaper modules helped improve the return on investment by 25%, on average.

In residential systems, the average price fell by 28% compared to January of the previous year and 14% compared to June 2023. According to the study, the average cost of a 4 kWp residential photovoltaic system was 2.3 euros, compared to 3.2 in January 2023.

The largest drop was seen in panels for commercial installations: a drop of 34% compared to January 2023 and 13.7% compared to June 2023, with the average price of a 50 kWp system estimated at 22, 7 thousand euros compared to 34.5 in January 2023. .

Industrial systems, with 1 MWp, reached an average price of 0.5 million, a cost 27% lower than at the beginning of 2023.
Photovoltaic modules represent between 25% and 40% of the final price of a system. The main input of the module is polysilicon, whose price reached US$ 8.25/kg in January 2024, a 51% drop compared to the same period in 2023.

Greener assesses that excess supply, resulting from the increase in production capacity in China, and the subsequent increase in inventory levels contributed to this variation.

“The trend is for prices to remain at similar levels, at least in the first half of 2024,” states the consulting firm’s report.

Steel, used in fixing structures, especially for terrestrial photovoltaic plants, also fell 9.9% compared to January 2023, reaching US$545/t in January 2024.

Two other important and cheaper raw materials are copper (input for investors) and lithium (storage).

Since the beginning of 2023, the price of copper has fluctuated between 8 and 9 dollars/kg, ending the year at 8.5 dollars/kg. Lithium fell 82% in the comparison between January 2024 and 2023.