Polysilicon Prices Continue Slide, Developers Hopeful Of Lower Solar Module Prices

For all the record capacity additions and installations in solar power, polysilicon prices have continued their downward move, halfway into 2023. Rising polysilicon prices, Prices that had peaked at CNY (Chinese Yuan) 360,000/mt ($39/kg) have dropped to as low as 80,000 CNY/Mt (around $9.5 /kg), helping push down solar panel costs for manufacturers. Even as existing Chinese manufacturers raised capacities during the price rise, those capacities as they come online, have caused a temporary glut, that is only likely to be cleared well into next year.

German research firm Bernreuters said that the top 4 polysilicon manufacturers were all Chinese firms,with Tongwei the largest producer in 2022 at around 345,000 MT of capacity last year, well above their stated capacity. Tongwei has expended into module production in a big way since 2021.

The second largest polysilicon maker was GCL Technology, followed by Daqo, Xinte, and  German firm Wacker Chemie. Even as capacities elsewhere outside China are being set up that will come online post 2025, Chinese capacity expansions have ensured that the relative share of China in global capacity will stay at or close to 90% in a market expanding 8-12% each year.

As some smaller players slip into losses, expect production shutdowns to support a price recovery of sorts soon. A full recovery of the over 75% drop seen since the peaks is not expected though, which will be a relief to developers who saw projects deferred or even cancelled due to the rise in end module costs.

Some industry research firms in China estimate that key polysilicon manufacturers  such as Daqo New Energy Corp. need $7.55 per kilogram to break even. The drop in polysilicon prices has cascaded down to  wafer, cell, and module prices  with only solar glass prices holding up relatively due to a large shift to larger modules and bifacials.

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Indian manufacturers who have started backward integration projects into wafer manufacturing, or even the new manufacturing capacities coming up under the solar PLI scheme will be keeping an eye on prices, as polysilicon is one key component that looks set to be imported well into the future.

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Developers we met at SNEC Shanghai this year estimated price reductions of upto 10-12% in final module costs before stabilising or even rising a little next year. Those estimates have become much more difficult to make ever since 2020, when the easiest thing to predict was a steady drop in module prices, as we saw in the 2010-20 decade.