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A key selling point that makes solar the world’s fastest-growing energy source-rapidly reducing costs-has reached a deceleration point.
After a 90% drop in the past ten years, the price of solar modules has risen by 18% since the beginning of this year. The price of polysilicon, a key raw material, has tripled. This reversal may delay projects and slow the absorption of solar energy. Several major governments have finally made their own contributions to mitigating climate change.
Jenny Chase, chief solar analyst at BloombergNEF, a clean energy research organization, said: “For more than a decade, the damage to solar energy has not been that serious.” “Developers and governments will have to stop expecting solar energy. It quickly becomes much cheaper.” In a report last week, BNEF slightly lowered its forecast for solar energy accumulation this year, citing rising material prices, including polysilicon.
Panel maker Canadian Solar Inc. (Canadian Solar Inc.) said on Thursday’s earnings call that rising prices are affecting demand and may delay some large-scale projects. Citing unnamed developers, Mint reported that in India, about 10 gigawatts of projects may be affected, which is equivalent to more than a quarter of the country’s current capacity. Analysts at Cowen & Co. said that large-scale projects in the United States may also be delayed.
Xiaojing Sun, an analyst at Wood Mackenzie Ltd, said that unless customers are willing to pay a higher price for electricity, projects that have not signed a price agreement with the utility company that purchases the electricity may be delayed.
For the solar industry, the timing couldn’t be better. Renewable energy finally won the White House, and Europe and Asia have announced ambitious climate goals.
At the center of the crisis is polysilicon, which is a super refined silicon and one of the most abundant materials on earth, most commonly found on the beach. As the solar industry ramps up preparations to meet the expected growth in module demand, polysilicon manufacturers cannot keep up. Data from PVInsights shows that the price of purified metalloids has risen from less than US$6.19 per kilogram to US$25.88 per kilogram.
Analysts at Roth Capital Partners, including Philip Shen, expect polysilicon prices to remain firm by the end of 2022.
The problem is not limited to polysilicon. Panel maker Maxeon Solar Technologies Ltd. said in April that the solar industry is facing “general upstream supply chain cost challenges.”
Solar panels are made of heated and purified silica sand and made into superconducting polycrystalline silicon ingots. The ingots are then cut into extremely thin silicon chips, connected to cells, and then assembled into panels that can be installed on the roof and cover a wide area. .
The prices of steel, aluminum and copper, as well as shipping costs, have also risen. Enphase Energy Inc., a supplier of solar microinverters, said its shipments are expected to be limited by the availability of semiconductor components.
According to industry publication Solarbe, “Polysilicon downstream is very painful,” said Xiong Haibo, vice president of Canadian Solar, at a conference in China. “Currently, none of the downstream companies are profitable. They are all cutting production.”
Vena Energy Pte, a leading independent renewable energy operator in the Asia-Pacific region. CEO Nitin Apte said that the interruption in the long-term downward trend of costs is still partially offset by the continuous improvement of solar panel efficiency. . The company does not plan any delays on solar projects in Japan, Taiwan, Australia and India this year.
Nitin said in an interview in the Singapore office: “I think this is a short-term situation, some projects may swallow our unexpected situation.” “We will not slow down the construction speed. We lock in orders at the best price available. “
In the long run, the shortage is stimulating the construction of new polysilicon factories, including the announcement this month that it will become the world’s largest factory in China.
Vena’s Nitin said: “It is hoped that any material that has the ability to grow polysilicon will continue to inject capacity into the system.” “The challenge is to perfectly grasp the timing of growth.”
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