Some Taiwan-based solar cell makers are offering contract quotes of US$1.35-1.38/W for December 2010, down about 3% sequentially but still less than the 5-10% reduction predicted by Gintech Energy in September, according to industry sources.

Gintech believes a price drop represents a healthy business cycle. As the solar industry approaches its annual off-season, lowering prices is a logical move. The company is cautious about reading too much into the recent price drop, and emphasized that correct pricing will drive market growth.

Several of Taiwan's solar cell makers have yet to determine December quotes citing strong orders, the sources said, adding that these players are still waiting for price adjustments by fellow makers before finalizing their own quotes.

Motech Industries chairman Simon Tsuo recently said that a significant price drop in December is unlikely as orders for some installation projects scheduled for 2011 will be coming in in December.

Several external factors have muddled up the price trend for the end of the year and early 2011, which is typically the low season. However, with several countries planning to lower incentives in 2011 and new capacity in China and Taiwan going online soon, actual supply and demand remains to be seen.