No respite in sight for polysilicon price hikes – pv magazine International

A prominent analyst in China expects the price of solar panel feedstock to soon top CNY300 (AU$65.5) per kg and says sky-high prices will continue at least until September.

Excerpt from pv magazine Global

Amid ongoing problems with China’s polysilicon production, an analyst has predicted that the price of solar panel input material will “soon” top CNY300 (AU$65.5) per kg.

The latest bulletin released by AECEA (Asia Europe Clean Energy (Solar) Advisory) indicated that the price of poly has increased by 25% since the beginning of the year, reaching an 11-year high of 291 CNY/kg. beginning of July.

A recent fire at a production base and planned maintenance at five factories – in addition to the ongoing Covid-19 crisis and logistical disruptions – prompted the in-country consultant to reverse the prediction he made in June according to which prices would drop to 220 CNY/kg in September and 190 CNY/kg in December. That outcome, the AECEA said this week, is now “rather unlikely”.

Changing dynamics

While solar panel makers have so far largely leveraged their ability to pass on price increases to customers, increases of 18%, 12% and 8% in the price of solar wafers, cells and modules, respectively , since the beginning of the year could have changed this dynamic. AECEA cited a module purchase order that had included a ceiling price of CNY 1.98 per W of production capacity and suggested that other developers might follow suit.

That prospect, in turn, is prompting “roughly a dozen module makers…including several high-profile companies,” according to the analyst, to consider suspending factory production.

Factory closures

So much for a voluntary interruption of production. Solar companies could also face the prospect of forced shutdowns for a second winter, AECEA reported, if upstream solar plants wanted by provincial governments to meet Beijing’s climate carbon scoreboard targets increase the electricity consumption.

Provinces are already trying to attract factories by tying generation investment to capacity rewards for solar projects, as the Indian government has done.

In terms of polysilicon prices, the AECEA expects supply to remain tight until the end of September. The country added an impressive 23.71 GW of solar generation capacity in the first five months of the year, prompting China’s Institute of Renewable Energy Engineering to expect “up to 100 GW” this year. AECEA, however, stuck to its expectation of 80-90 GW, thanks to the price turmoil.

The consultant again underscored China’s dominance in solar production by referring to statistics recently released by the China PV Industry Association which indicated that the country produced 98% of the world’s silicon wafers in 2021 and 85% of the world’s combined production of polysilicon, wafers, cells and modules.

giant wafer

One company, TCL Zhonghuan, produced about a quarter of the world’s solar wafers in 2021, AECEA added. Ongoing plans to increase poly production mean China is likely to replicate its wafer dominance in this segment of the supply chain in “the not-too-distant future”, according to the industry commentator.

On the technology side, the analyst predicted that China will host 15-20 GW of mass production heterojunction solar power plants in 2022, of which only 3 GW will be for R&D purposes. Yunnan Province, AECEA reported, predicted that commercially available products will have a conversion efficiency of more than 25% by 2024.

While solar perovskite has yet to have a similar impact, the analyst pointed out that battery company Catl’s decision to invest in the technology could be a game-changer.

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