Solar module prices surged to 35% amidst inflated costs of raw materials

Some Chinese manufacturers don’t see prices lowering until after 2021.

Overall solar module costs had increased by 35% and will likely remain high throughout 2021 as the prices for raw materials skyrocketed.

Chinese manufacturer LONGi that the PV industry has experienced several rounds of raw material price increases since the second half of 2020 - from polysilicon to materials such as PV glass and silver paste.

“Between June 2020 and February 2021, glass prices surged by around 80% per square meter. Prices for polysilicon and silver also skyrocketed by 64% and 55%, respectively. Silver is mainly used in manufacturing silver paste for solar cell metallization,” LONGi said in a statement.

A research by Energy Trend said that the latest polysilicon price of RMB135/kg (US$20.69/kg) is up 3.3% on last month’s price, while analysts expect the price could reach RMB150/kg (US$23/kg).

LONGi said panel manufacturers were not able to absorb the steep rise in upstream cost. Meanwhile, freight rates have also increased substantially due to a shortage of shipping capacity under COVID-19 regulations for the crew, pushing up module prices further.

The chairman of the board of directors and chief executive officer of JinkoSolar Xiande Li said that 2020 was a very challenging year for the solar industry as global markets were shrouded in uncertainty due to the COVID-19 pandemic.

"Since the fourth quarter of 2020, the mismatch between supply and demand continued to drive volatility upstream and downstream. We predict this scenario will continue into the second quarter of this year. While there are still supply shortages, there is enough polysilicon to support over 180GW of module production and supply is sufficient in most segments of the supply chain. As global installation levels are still likely to increase this year, demand for modules will revive once market prices are stabilized," Li said

JinkoSolar said the shortage in materials, specifically polysilicon, is here to stay for a while with no signs of supply catching up anytime soon.

“Furthermore, this will cross over to the whole ecosystem, and it is expected that silver and copper will also see upward price trends. Industry experts and analysts following this situation very closely have concluded that price projections that we are getting today are probably the best and the lowest in the next six-month timeframe or even longer,” the company said.