(Yicai Global) Dec. 23 -- The price of solar wafers used in the photovoltaic industry plunged by as much as 20 percent last week due to a year-end inventory selloff by suppliers.

Solar wafer prices fell between 15 percent and 20 percent in the past week from the previous one, according to data from the Silicon Industry of the China Nonferrous Metals Industry Association. Prices of large-sized wafers fell the most.

China’s solar energy sector has had to contend with high polysilicon prices in recent year because of tight supply, with polysilicon and silicon wafer producers pocketing most of the industrial chain’s profits. But since the start of this year’s third quarter, prices have been dropping as more and more new capacity comes on stream.

“New silicon material capacities are being released, easing the shortage and pushing down prices,” a PV company executive told Yicai Global, so “solar wafer makers must sell all the products made this year with expensive raw materials before it is too late.

“A sustained decline in upstream silicon materials and solar wafer prices will help balance the allocation of industrial profits in the industry,” the person added, noting that it will benefit downstream panel suppliers that have been under pressure for years because of high costs.

Falling raw material prices are enhancing the bargaining power of downstream panel makers, expanding their leeway when negotiating with both solar cell suppliers and their solar power station developer clients, as they no longer need to be concerned about rising costs.

The quick decline in raw material costs has begun to impact the downstream batteries and modules market. Prices of mainstream battery cells and panels fell 15.4 percent and 10.4 percent on average last week from the prior one, per data from the Silicon Industry of the China Nonferrous Metals Industry Association.

Editors: Tang Shihua, Futura Costaglione