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<p>Solar module manufacturers believe that prices of Chinese modules are expected to stay high until the first quarter (Q1) of the calendar year (CY) 2022. Modules prices have gone up from $0.25/W in the first quarter (Q1) of 2021 to over $0.30/W to date.</p>
<p>According to the Asia Europe Clean Energy Advisory (<a href="http://www.aecea.com.de/" target="_blank" rel="noopener">AECEA</a>), raw materials prices have increased, and as a result, prices for polysilicon, EVA, backsheets, aluminum framers, and solar glass have also increased. Consequently, prices for solar panels have reached a level not seen in the past 12-18 months.</p>
<p>AECEA said that the polysilicon prices have continuously declined since early 2018 and reached an all-time low level of RMB 56 (~$8.71)/kg in April-May 2020. However, the prices have continuously increased since April 2020, and the latest transaction price was approximately 270 renminbi (RMB) (~$42)/kg.</p>
<p>Bharat Makkapati, Regional Sales Director at <a href="https://www.znshinesolar.com/" target="_blank" rel="noopener">ZnShine Solar</a>, said, “The prices of solar modules are expected to stay on the higher side until Q1 2022. It will stay in the range of $0.28/W to $0.32/W in the upcoming two quarters due to shortage of raw materials.”</p>
<p>“The polysilicon price is at an all-time high of 270 RMB (~$42)/kg. Production has been cut down in China due to the power crisis in the country. This will impact module prices. In addition, there is a shortage of other raw materials, and higher metal prices also affect the module prices. Modules account for 55-60% of capital expenditure (CAPEX) of solar projects in India. Therefore, the increase in module prices is expected to increase the overall CAPEX of solar projects by around 18-20%,” Makkapati added.</p>
<p>In addition, China’s Yunnan provincial government has released instructions to reduce silicon production output by 90% from September to December 2021. The province’s industrial silicon output accounted for 20% of China’s total domestic supply. Therefore, module prices could stay at an all-time high level during the next two quarters.</p>
<p>Echoing similar thoughts, a senior executive of a solar module manufacturing company said the prices of solar modules increased around 20% in the past two quarters. There is a shortage of raw materials due to the power crisis in China, and it increased the prices of raw materials like silicon and solar glass. Therefore, module prices rose in the past quarters and are expected to rise until Q1 2022.</p>
<p>“The increased module prices will affect solar projects in India. Solar projects will be unviable at the tariffs contracted in power purchase agreements as the CAPEX of projects will increase by 18-20%,” he added.</p>
<p>Speaking to Mercom, another module manufacturer said that the prices will rise for another five to six months, and this trend will persist until Q1 2022. “The situation is going to get worse before it improves, and there are multiple reasons for it. One of the reasons is the shortage of silicon which has driven polysilicon prices to a new annual high. The power crisis in China and a host of other issues are responsible for the increase in prices. The price has gone up to $35/kg for silicon right now, and it will only go up in the near future,” he noted.</p>
<p>Given the current scenario, polysilicon prices are expected to stay high in the near term, with limited additional supply coming online in the next couple of months and due to a massive shift of demand from 2021 into 2022.</p>
<p>Mercom is hosting a virtual conference, “<a href="https://mercomindia.com/solarforum2021/overview/" target="_blank" rel="noopener">Mercom India solar Forum 2021</a>,” on October 21. The event also includes sessions on &#8216;A Look at India’s Solar Supply Chain and Sourcing Strategies,&#8217; and &#8216;Moving Towards a Domestic Manufacturing Base With Sustainable Demand&#8217; to discuss the changing scenario in solar component manufacturing and supply chain.</p>
<p>The virtual event is free to attend. To register, you can click <a href="https://mercomindia.com/solarforum2021/register/" target="_blank" rel="noopener">here</a>.</p>
<div class="saboxplugin-wrap" itemtype="http://schema.org/Person" itemscope itemprop="author"><div class="saboxplugin-tab"><div class="saboxplugin-gravatar"></div><div class="saboxplugin-authorname"><a href="https://cms.mercomindia.com/author/harsh-shukla/" class="vcard author" rel="author"><span class="fn">Harsh Shukla</span></a></div><div class="saboxplugin-desc"><div itemprop="description"><p><img class="alignleft" src="https://mercomindia.com/wp-content/uploads/2022/02/Harsh-Shukla-293x300-1-new.jpg" width="99" height="102" /><a href="https://mercomindia.com/author/harsh-shukla/" target="_blank" rel="noopener"><strong style="color: #00b451">Harsh Shukla</strong> </a>is a staff reporter at Mercom India. Previously with Indian Express, he has covered general interest stories. He holds a Masters Degree in Journalism from Symbiosis Institute of Media and Communication, Pune.</p>
<p><a href="https://mercomindia.com/author/harsh-shukla/">More articles from Harsh Shukla.</a></p>
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Solar Module Prices Could Remain High Until Q1 2022

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