The price of solar products has been decreasing continuously. Industry sources indicated the price has been dropping close to variable costs. If the condition continues, pay cuts and lay-offs will be possible.

The solar industry has been experiencing the shocks from oversupply such as firms clearing out inventories with unreasonable low prices. Industry sources indicated that many firms have been clearing out inventories in exchange for cash. This has been pushing down the solar prices. Industry sources noted there have not been signs of end to such price drops.

The low price range of solar cells has been around US$0.40-0.45/watt, close to the variable costs of many firms.

If the condition lasts for more than six months, the firms will have to adjust costs by pay cuts and lay-offs, said industry sources. However, in the short-term, Taiwan-based firms are unlikely to have such problems, added industry sources.