67% of China's solar panel manufacturers plan to raise export prices in 2007, according to Global Sources' new "China Sourcing Report: Solar Panels".

"Solar cell prices, which have increased by about US$0.30 per watt in the past two years, are expected to rise further, driving the cost of solar panels higher," said Global Sources general manager of Content Development, Michael Kleist.

Among surveyed solar panel manufacturers' top concerns and primary challenges for the next 12 months: 56% cited higher raw material costs; 20% said price competition; 14% cited design copying/piracy; and 10% said power and labor shortages.

"With margins at about five percent for many manufacturers, the market is expected to continue to be challenging in the months ahead," Kleist said.

According to surveyed manufacturers, 22% plan to increase capacity by more than 50%.

"One bright spot for China's exporters is the EU," said Kleist. "Due to favorable legislation, which includes financial incentives encouraging the use of renewable energy, many manufacturers are targeting exports to this market."

Among surveyed manufacturers, 74% plan to focus on exporting to the EU; 20% plan to target exports to the United States; and 6% plan to focus on the Mideast/Africa and Asia.

The report provides market information from in-person factory visits to 17 manufacturers and interviews with 32 more suppliers.