Gintech Energy plans to lower its solar cell prices by 5-10% starting from December 2010, according to company chairman Wenant Pan. The announcement has surprised fellow rivals as it comes during a time of supply shortage for solar wafers.

Sources at Gintech's fellow solar cell makers believe the price-cut move is meant to pose a challenge to companies which are blindly expanding capacity, and also newcomers.

Pan observed that the solar industry will face a tough period between December 2010 and early 2011, as demand starts to weaken. Gintech is aware that ongoing expansions at solar cell players worldwide may have a negative impact on the market during the period.

Major solar cell suppliers have seen orders in excess of capacity recently. Second-tier players have also been raising their prices on the spot market because of brisk demand. Spot prices of solar cells have risen to US$1.47/W from the previous US$1.43-1.45/W.