After analyzing quarterly numbers from Yingli, Trina, Canadian Solar, and Suntech, we have determined that module prices declined 36% over the course of 2011. The average selling price (ASP) in Q1 of 2011 was $1.76/W. By Q4 2011, the ASP was $1.11/W for these tier 1 manufacturers. The ASP over the entire year of 2011 was $1.44/W.
The precipitous fall in module prices was caused primarily by declining polysilicon costs. In March 2011, the polysilicon spot price was around $80/kg, which fell below $27/kg in December. The polysilicon spot price rebounded to $29/kg in February 2012, but fell back below $27/kg in late March 2012. At the same time, the intense competition caused by a global oversupply of PV modules has eaten away margins for manufacturers, further reducing prices.
The margins are so low that, even if polysilicon prices continue to drop, we expect module prices will stay between $0.90/W and $1.00/W over the next few years as manufacturers restore margins. Make sure to note that these prices are for tier-one, crystalline silicon manufacturers, not smaller, less reputable manufacturers nor thin-film manufacturers who will sell at lower prices.