The price drops of solar products have been easing in fourth quarter. Industry sources estimated the global inventory level in the beginning of the fourth-quarter 2011 is around 6-8GW, much better than the previous estimation of 10GW.

Due to the upcoming changes in the solar incentive programs in 2012 announced by governments in Europe, the solar market has been experiencing a slight surge in orders in the fourth quarter. However, as orders are likely to decrease in the second half of December, price fluctuations are once again expected, added industry sources.

Industry sources pointed out that fourth-quarter may be the quarter with the highest installations in Europe in 2011. But due to high inventory levels, demand has not been solving the oversupply problem in the solar market.

The average selling price (ASP) of solar cells in fourth-quarter 2011 has been around US$0.45/watt. However, many firms have been holding the price at US$0.50/watt.

Industry sources added that first-quarter 2012 may be the worst quarter for the solar industry to go through as it is the traditional low season and oversupply will continue to gloom over the market.