Japan Solartech (Bangladesh) Ltd has deferred its plan to assemble solar panels in the country for the next two years due to a drastic fall in prices on the global market.
Earlier, the company rolled out a plan to start assembling solar panels in Chittagong by last December with a capacity of 50 megawatts, with eyes on local sales and exports.
It aimed at setting up the plant as part of its strategy to establish Bangladesh as a regional hub of solar products and energy-efficient home appliances.
The price of the panels hovers around $1.5 per watt peak, down by 33.33 percent from prices eight months ago.
“We have delayed operations of the solar panel plant as panel prices have recently gone down in the global market,” said Mohammed Rafiqul Islam, deputy managing director of Japan Solartech.
He said global demand for solar panels is around 13 gigawatts a year, but companies from China, Germany, Japan and countries in Europe have already produced solar panels worth 16 gigawatts. As a result, a surplus of 3 gigawatts has been created, bringing down the prices.
The local company now finds international prices to be 50 cent (per watt peak) lower than its local assembling cost. The excessive production was mainly due to a huge investment by Chinese companies, said Syed Samiul Huq, a director of the company.
Huq said the company will decide on its future plan after two years, when the present stockpile depletes.
At present, China contributes around 48 percent to global demand for solar panels, Germany 10 percent, Japan 11 percent and the rest from Europe and other countries.
The company, however, will make solar batteries in March as it has already set up a factory in Chittagong, Huq said.
He said the factory will make around 10,000 solar gel batteries a month, which will be produced with the advanced nonmaterial silica gel. So, it will have a longer life and can run smoothly at high and low temperatures.
Japan Solartech, established in January last year, is a joint venture between UING Corporation, a unit of Japan's U-TEC Group, and Trade Service International, a trading company and distributor of TOTAL Lubricants in Bangladesh.