‘Solar module prices will soon go back to over $0.12/W’
Solar module prices are expected to increase significantly from current levels in the next six months, according to Yana Hryshko, head of Solar Supply Chain Research for Wood Mackenzie.
“Prices have to increase, as the Chinese solar manufacturing industry is going to do everything to make this happen,” she told pv magazine. “We may see up to 300 GW of wafer, cell and module capacity be wiped out of the market soon, mostly coming from non-Tier 1 manufacturers. And unlike Tier 1 producers, nobody will try to save them.” Pure cell and wafer manufacturers without downstream module manufacturing and module manufacturers with outdated technologies, such as PERC and low-efficiency TOPCon, are most likely to be impacted.
Hryshko believes that the expected wave of insolvency would affect mainly Tier 2 and Tier 3 manufacturers, which could rebalance the market and help bridge the gap between demand and supply.
“Maybe many of the affected manufacturers will not go bankrupt but simply repurpose their facilities for other sectors,” she said, noting that polysilicon prices are now already increasing, with wafer and cell prices expected to follow. “On the other hand, Tier 1 producers have not reduced their capacity, but have limited their production outputs since December, when they agreed to the self-discipline agreement imposed by the Chinese government. The agreement envisages around 650 GW of production for this year, which would be enough to meet a global PV demand ranging between 600 GW and 700 GW.”
According to data from Wood Mackenzie, the global current operational module manufacturing capacity stands at 1.491 TW, of which 1.188 TW is in China. Hryshko explained that this operational limit in China will create an artificial module shortage.
“What the Chinese Government is doing in this regard is having an effect,” she said, explaining that newly-released PV industry manufacturing guidelines will also contribute to consolidating the production landscape in China. “If you read between the lines, these guidelines are designed to support the biggest manufacturer, as if you are not efficient enough and you have outdated technology, you cannot build new capacity.”
Hryshko also notes that most of all the recently-announced manufacturing capacities in China are for heterojunction (HJT) or back-contact technologies. “There were no announcement of new TOPCon facilities so far this year, while PERC is going to be phased out by the end of 2025, or even earlier,” she said. “The technology transition is happening much faster than everyone expected.”
Hryshko expects prices of high-quality Tier 1 solar modules to soon exceed $0.12/W. “This means module prices will at least match production costs for the first time in months,” she highlights. “And this should happen within six months. For a while, however, we will still see a lot of cheap, low-quality modules on the market but, at some point, it will stop. On the other hand, we have to understand that cell suppliers, wafer suppliers and polysilicon suppliers have all lost money. Especially those that are also solar cell and wafer sellers. Now, they want to have the money they lost back and it's not like the buyers have choice.”
The analyst also explains that the PV industry may return to pre-Covid levels, with module prices ranging between $0.13/W and $0.14/W, or even higher “I think that the module prices will range between $0.12/W and $0.15/W depending on the technology by the end of 2025,” she concludes.
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