Buyers Rate Reliability and Quality as More Important Than Price in PV Modules, IHS Survey Indicates

The survey was conducted among photovoltaic system installers; integrators; engineering, procurement and construction (EPC) entities; and distributors of PV components, who all buy modules from the makers.

Munich, Germany (March 26, 2014)—The most critical factors for buyers when selecting a photovoltaic (PV) module are reliability and quality, which were found to be more important than low prices, according to a recent survey of solar module purchases conducted by IHS Technology (NYSE: IHS).

In the survey, respondents were asked to rank various PV module aspects by importance, ranging from efficiency to weight and size. The chief factor by a significant margin was module reliability, with 99 percent of respondents deeming the characteristic as either "very important" or "important."

In comparison, "high quality" was named the second most important aspect and "low price" was revealed as the third. While quality was seen as the top aspect across three major regions analyzed in the research, other attributes were regarded as weightier in some regions than others. In particular, low pricing was more significant to respondents in the United States than in Germany and the United Kingdom, where "high efficiency" was placed at a higher premium.

The survey was conducted among photovoltaic system installers; integrators; engineering, procurement and construction (EPC) entities; and distributors of PV components, who all buy modules from the makers.

"While price is still a highly important factor when selecting PV modules, purchasers believe that performance-related factors are of greater value, particularly in European markets," said Stefan de Haan, principal solar analyst at IHS. "This is a reflection of the growing awareness and focus on the total cost of ownership of a PV plant in Europe. As incentive levels and internal rates of return (IRR) for all types of PV systems become lower and lower, the cost of every kilowatt-hour becomes increasingly important. In other markets, such as the U.S., incentives more commonly take the form of grants and tax breaks—meaning that there is a slightly stronger focus on upfront cost."

These findings can be found in the "PV Module Customer Insight Survey," from the Power & Energy service of IHS. The report, which allows PV module suppliers to better understand the needs and opinions of their customers, also investigates the buying preferences and preferred brands of customers. Three of the top five brands, it concludes, are Chinese.

Installers and EPCs keen to spread their bets

In determining the preferred brands and buying preferences of customers, the survey also uncovered that less than 10 percent of companies use a single module supplier for their entire business, with EPCs and integrators less likely to use one brand compared to smaller installers.

As few as 20 percent of respondents would consider using just one brand in the future, doing so in order to obtain better pricing as well as easier system design and logistics. The majority of customers, however, reported they would never consider using a single brand for an entire business.

"PV module purchasers demonstrate a clear preference for maintaining business relationships with more than one module supplier, as this allows them to ensure they are receiving competitive pricing and provides them with access to as wide a range of products as possible," de Haan noted. "Importantly, many also express a reluctance to rely on a single company for their total module supply, reflecting clear concerns about the survival of module suppliers and suppliers' capability to provide sufficient and flexible stockpiles."

Chinese brands dominate rankings

Despite the professed preference of solar module buyers for using more than one brand, over half of customers reported having a favorite. Survey respondents were asked to list their overall preferred brands, as well their chosen names in terms of quality and price attractiveness. Three Chinese suppliers appeared among the top five overall brands, and the five top brands in terms of competitive prices were also all Chinese.

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