(Adds details)     OSLO, July 24 (Reuters) - The global solar panel market is still struggling with excess capacity and prices fell further at the start of the quarter but  are expected to stabilise in the third quarter, solar panel maker REC Solar  
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    said on Thursday.     China and Japan will be the biggest markets this year, accounting for half of global turnover while the biggest improvements in the second half are seen in the United States and China, even as Europe struggles, said REC Solar, a newly formed firm, split from REC Silicon  
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   .     "The solar industry has moved towards a more balanced supply-demand ratio, but still maintaining some excess production capacity," REC Solar said as it reported a big increase in second-quarter profit, helped by a one-off tax refund.      "REC expects softer market conditions in Europe and Japan in the third quarter related to seasonal effects and increased competition," it added.     REC Solar, which does not have year ago figures, said its second-quarter earnings before interest, taxes, depreciation and amortisation rose to $21.1 million from $16.2 million in the first quarter, but the figure also included a $7.4 million property tax reimbursement.     The firm said it expected to produce around 950 megawatts of modules this year, slightly above its previous guidance for around 940 megawatts, but warned its cost targets were tough to meet.     REC has targeted a reduction of 8 percent to 12 percent in solar panel cash costs from the fourth quarter of 2013 to the fourth quarter of 2014. "(The) increase in some raw material prices, however, may make it challenging to achieve our cost target," it added.     REC Solar's production is concentrated in Singapore.   (Reporting by Balazs Koranyi; Editing by Clarence Fernandez)  ((Balazs.Koranyi@thomsonreuters.com)(+47 2331 6596)(Reuters Messaging: balazs.koranyi.thomsonreuters.com@reuters.net))  Keywords: REC SOLAR RESULTS