Although solar cell prices have yet to fall significantly and most makers continue to say that capacity is fully utilized, solar module and system companies indicated that they are seeing more sufficient solar cell supplies with improvements in both shipment times and volumes.

At the peak of the solar cell shortage in the second and third quarters of 2010, delivery times were one month on average, and volumes received were about 30-50% of orders, module makers pointed out.

Recently, module companies have noticed that solar cell makers are now able to fulfill express orders in reasonable volumes in shorter time frames. This could be an indication that new solar cell capacities are now operational and cell suppliers have higher inventory levels.

With solar cell makers able to fulfill contract orders, module makers are procuring less from the spot market, which has prompted spot prices to fall modestly to US$1.42/W. Industry sources pointed out that the lack of price reductions on the spot market, despite fewer transactions, could be due to solar cell makers artificially buoying prices, to help in negotiating December contract quotes.

Though some solar cell makers have reduced December contract prices by 3% sequentially, it is not enough to effectively stimulate demand since cell prices went up at the beginning of the fourth quarter, according to the module and system companies. However, judging from current shipments, further price reductions are a possibility, they added.