According to Yana Hryshko, the head of Solar Supply Chain Research at Wood Mackenzie, the global solar module industry is poised to achieve a sustainable balance within the next six months. In an interview with pv magazine, she provided insights on the anticipated rise in solar module prices, predicting that prices for Tier 1 modules could reach between $0.14 and $0.15 per watt by the end of this year. She also discussed the ongoing consolidation within the global photovoltaic (PV) industry.
Hryshko emphasized that solar module prices are likely to rise significantly in the coming months. “Prices must increase, as the manufacturing sector is determined to make it happen,” she stated. She anticipates that up to 300 GW of wafer, cell, and module capacity could soon exit the market, primarily from non-Tier 1 manufacturers, who are less likely to receive support compared to their Tier 1 counterparts. Manufacturers focusing solely on cells and wafers, as well as those using outdated technologies like PERC and low-efficiency TOPCon, are expected to be the most affected.
She noted that the anticipated wave of insolvencies among Tier 2 and Tier 3 manufacturers could help rebalance the market and align supply with demand. “Many of these manufacturers may not go bankrupt but might repurpose their facilities for other industries,” she remarked. Polysilicon prices are already rising, with wafer and cell prices expected to follow suit.
While Tier 1 producers have not reduced their capacity, they have limited production outputs since December due to a self-discipline agreement with the Chinese government. This agreement sets a production target of approximately 650 GW for this year, which aligns with a projected global PV demand between 600 GW and 700 GW.
According to Wood Mackenzie, the current global operational module manufacturing capacity is 1.491 TW, with 1.188 TW located in China. Hryshko explained that this operational cap in China will create an artificial shortage of modules. She also mentioned that new manufacturing guidelines released in China are expected to consolidate the production landscape, favoring larger manufacturers. “These guidelines effectively support the biggest players; if you’re not efficient or have outdated technology, you won’t be able to expand,” she explained.
Most recently announced manufacturing capacities in China focus on heterojunction (HJT) or back-contact technologies, with no new TOPCon facilities announced this year. PERC technology is projected to be phased out by the end of 2025 or sooner. Hryshko noted that this transition is occurring much more rapidly than anticipated.
She predicts that prices for high-quality Tier 1 solar modules will soon exceed $0.12 per watt, meaning that module prices will finally align with production costs for the first time in several months. “This shift is expected within six months. However, we will continue to see a significant amount of low-quality, inexpensive modules on the market for a while longer,” she added.
Hryshko also pointed out that suppliers of cells, wafers, and polysilicon have been operating at a loss, especially those involved in both solar cell and wafer production. As they seek to recover their losses, the lack of buyer options may drive prices higher. She anticipates that the PV industry could revert to pre-COVID pricing levels, with module prices ranging from $0.13 to $0.14 per watt, or potentially even higher. “By the end of 2025, I believe module prices will settle between $0.12 and $0.15 per watt, depending on the technology,” she concluded.
Original article by NenPower, If reposted, please credit the source: https://nenpower.com/blog/solar-module-prices-expected-to-rise-above-0-12-w-amid-industry-consolidation/
