Taiwan-based solar cell makers have yet to adjust their third-quarter quotes despite a 10% price cut by some first-tier solar module companies in Europe, according to industry sources. Taiwan's cell makers are mostly running at close to full capacity and believe, for them, pricing by China's solar companies is more indicative of the market, the sources said.

Simon Tsuo, chairman of solar cell maker Motech Industry, indicated that supply remains tight at the moment, and no clients have requested lower price quotes. Since most first-tier solar module companies in Europe are Germany based, the price cut is not surprising, he added.

Solar module makers in Germany have lowered third-quarter prices to offset the feed-in-tariff (FIT) slash on July 1, meaning other players on the continent most likely had to follow suit to stay competitive. Solar companies in Germany are expected to be more aggressive overseas to replace a potential demand drop in their home market.

Besides a generous FIT policy, Germany's solar sector also receives strong support from the government such as financing and efficient administrative response, and hence the country's solar companies are some of the most profitable in the world.

China-based solar module makers, which also have operations both upstream and down, are expected to soon announce their third-quarter quotes. By then, there will be a more precise direction for wafer, cell and module prices for the second half.

Recently, several first-tier module makers in Europe notified clients that third-quarter quotes will be lowered from the current 1.95 euros (US$2.38) per Watt to 1.73-1.80 euros per Watt. Solar system installers in the region that source modules for their own module vendors reportedly will also reduce prices to 1.50 euros per watt from 1.75-1.80 euros per Watt.

In the first-half of 2010, prices for solar wafers produced by Taiwan and China-based makers saw the biggest jump. For solar cells, Taiwan makers quoted more aggressively compared with their counterparts in China, which caused Taiwan-made modules to rise in price. Module quotes from China and Europe-based companies, on the other hand, have remained relatively stable.