What are the reasons for the recent rise and volatility in solar panel price?

Rising solar panel price

Impact on power station project development and solar panel price

Affected by the new crown epidemic, the current chaos in the global supply chain is intensifying. In some countries such as the United States, for goods and goods such as semiconductors, home appliances, furniture, toys, etc., it may take six months or even a year for many consumers and enterprises downstream of the industrial chain to receive goods. Solar panels are no exception. If the production raw materials and transportation costs of solar-related components increase, it may threaten the development progress of power plant construction projects in the next year.

Rystad Energy, which provides consulting and research services in Norway, analyzed that due to rising prices of daily necessities and poor upstream and downstream supply chains, about 56% of the 90GW planned solar power plant projects for power generation in 2022 will be affected, or even 50GW. Postponement or cancellation. The solar power generation project for power generation business mentioned in this article refers to the ground facility project with a power of 1MW·AC or more. If this happens, the demand for solar power generation equipment and the price to consumers will also be affected. Rystad Energy believes that China, the United States and India will likely be most affected by this in 2022.

Organizations such as the American Solar Energy Industry Association predict that the total import of solar power generation for power generation in the United States in 2021 will be 17.9GW·DC, the largest in history; the solar power generation market in the United States is expected to exceed 20GW in 2022. If U.S. solar next year develops as predicted, this supply chain disruption could hit the U.S. solar power market hard.

02 solar panel price

Rystad Energy analyzed that before 2021, the impact of changes in the transportation solar panel

price on the overall system cost changes is limited. However, after the outbreak of the new crown epidemic, due to delayed shipments and poor supply chains, the transportation cost per watt rose sharply from $0.005 in September 2019 to $0.03, an increase of 500%. As a result, and solar panels and their The freight of related materials will increase from one-fourth of the total investment in the equipment of the power station project to one-third, making it one of the most expensive items in the power station project. Therefore, if the cost of the panels and their transportation increases, it will have a big impact on the overall economics of the project.

In addition to transportation costs, power station developers and panel suppliers will face another major problem in the supply chain - rising raw material prices. Rystad Energy said that for the price increase of the core components of solar panels, the production cost of the panels rose from less than US$0.2 per watt in 2020 to US$0.26 to US$0.28 in the second half of 2021, an increase of 50%. The company also predicted that, According to the news from the relevant industry, the relevant prices may not drop until the second half of next year, and may even continue to rise. Prices may continue to rise to $0.26 to $0.3 per watt in the first half of next year.

A big reason for the rise in solar panel price is that the cost of polysilicon has increased rapidly by more than 4 times, an increase of 300%. In addition, the prices of raw materials such as silver, copper, aluminum, and glass have all risen since January 2020, which makes the panels The price increase has further increased. Regarding the background of the price increase of polysilicon, a market analyst from SPV Market Research, a US solar power market research consulting firm, said that the floods in Shanxi in 2021 will lead to unstable coal production in China.

What's New: Fluctuations in Silicon Wafer Prices

From the perspective of silicon wafers, although the price of silicon wafers will maintain an upward trend for the time being, short-term changes in supply and demand have also led to a brief drop in silicon wafers while maintaining the upward momentum.

The first is the continuous decline in the price of silicon wafers due to the lack of strong terminal demand in the supply chain.

In addition, inventory is also an important factor affecting the price of photovoltaic silicon wafers.

Looking back at the upward trend of raw material prices this year, the price of photovoltaic silicon materials has risen from less than 90 yuan per kilogram at the beginning of this year to a maximum of 260 to 270 yuan per kilogram, and the price of 182mm silicon wafers has also risen from 3.90 yuan at the beginning of this year to the highest. 6.87 yuan for a piece.

Since October, due to factors such as sluggish downstream demand in the supply chain, peaking of raw material prices, and possible price drop losses caused by inventory factors, the production scheduling of module companies has declined. As a result, the production schedule of glass and film has also been reduced.

The destocking behavior of photovoltaic module companies is gradually transmitted upstream to silicon wafers, and the price of silicon material has dropped from the previous peak of 260 to 270 yuan per kilogram to 230 to 240 yuan per kilogram. With the accelerated production of silicon material production capacity of domestic leading enterprises, the expectation of price decline has been strengthened, which has accelerated the destocking of silicon wafers and the decline of silicon wafer prices.

Epilogue

For the solar energy industry for power generation, the past few years can be said to be the most difficult period, and the status quo of upstream and downstream compensation in the supply chain is expected to be difficult to improve in the next year. For power station developers and power purchasers, in order to ensure financial security, should they reduce profits, delay projects, or increase electricity prices through PPA? These will be questions they have to think about. As the epidemic gradually eases, it is believed that the related costs in the solar industry will still fall back to a normal track and will continue to decline. The prospects for the solar industry are still promising.