An upsurge in solar demand at the end of 2011 has brought hope to solar firms. As inventories have been cleared out, solar firms plan to increase prices slightly after the Lunar New Year. Industry sources indicated that supply continues to outpace demand, hence a small increase is more suitable.

The solar industry has been considering an increase in prices due to the sudden surge of demand at the end of 2011. However, Germany plans to cut incentives by 15% in January 2012. According to Germany's policies, if total installations from January-April exceed 225MW, another 15% cut will be initiated on July 1. These incentive cuts may compress demand. Hence the price of solar products is unlikely to increase significantly in 2012.

Furthermore, oversupply conditions continue to exist causing many firms to shutdown production. If the price of solar products rebounds strongly, these firms may resume production, worsening the problem of oversupply. Hence, some China-based firms hope to hold the low price longer until the competition exits the market.