The report, from EnergyTrend, a division of market research firm TrendForce, said photovoltaics have encountered a freeze in demand as the industry enters the third quarter of 2016.
EnergyTrend expects the market for solar power to get even worse next month, and demand is not expected to pick up even by the end of the third quarter, according to Corrine Lin, assistant research manager of EnergyTrend.
"Compared with other segments of the supply chain, the module industry has engaged in the largest capacity expansion this year," Lin said in a statement. "Prices have fallen simultaneously in different regional markets as inventories pile up. In most markets, modules have come to around 44 cents to 47 cents per watt this month."
At the same time prices are bottoming out, President Barack Obama today announced a new initiative to install 1GW (one billion watts) of solar power for low- and moderate-income families by 2020.
Especially in the U.S. market where photovoltaic supplies tend to be more profitable, EnergyTrend projects a 10% price drop from June to the fourth quarter of 2016.
In The Clean Energy Savings for All initiative, revealed on Tuesday, the U.S government will work with state agencies to help achieve the goal by promoting innovative financing mechanisms and bolstering technical assistance.
The federal government will also work with more than 120 housing authorities, rural electric co-ops, power companies and organizations in more than 36 states to increase investments in solar power for lower income residents.
A solar cell is the smallest unit of a rooftop solar panel that converts light into electric current via the photovoltaic effect. Solar cells start with raw materials -- either monocrystalline (mono-Si) and polycrystalline (poly-Si) -- that are melted down into cylindrical wafers and then cut into round disks or "ingots" less than a centimeter thick.
Just as in computer chip production, the silicon ingots are then polished and a doping agent (a trace metal such as boron) is added to the wafer to alter the electrical properties. Metal conductors are then added to the disk in a grid-like matrix. Then, a thin layer of glass is added over the wafer, creating the completed photovoltaic cell.
At that point, the photovoltaic cell is attached by a thermally conductive cement to a substrate material, such as amorphous silicon or cadmium telluride. Each cell is then wired together with others to create a solar panel that can be attached to a rooftop or used in a solar farm.
A flood of wafers, cells and modules from places such as Taiwan and China, which is also using aggressive pricing, has saturated a still relatively nascent market.
So far this month, the average trading price of poly-Si wafers has dropped to 75 to 77 cents each and the average trading price is expected to eventually dip below 74 cents per wafer, Lin said.
"The [photovoltaic] cell market has suffered from depressed demand. Cell suppliers are now competing with prices that are below product costs," Lin said.