Solar Module Prices Hit 2 Year highs, Gap Between Multi, Mono-Perc Widens

Solar Module prices in China’s ‘spot’ market continued to rise further at the end of the China National Day Holiday Weekend. Thus, the price trend continues unabated from before, with no immediate sign of respite.

We had reported last week on how the top 5 Chinese manufacturers had urged developers to go slow, or defer projects till the situation normalises.

For India, the impact will be felt with a lag, thanks to the gap between orders placed and delivery. Though developers have learnt at their cost that a really wide gap between their purchase price and spot prices could even lead to cancellations in some cases. Interestingly, the absense of safeguard duty from August this year means that Indian importers in particular have bought themselves some respite, if they can work around the other non-tariff barriers that have been erected, namely the exclusively Indian manufacturer populated ALMM (Approved List of Module Manufacturers) that has been mandated for government supported projects.

According to a Shanghai-based source for SaurEnergy, Current prices are being quoted at 22 cents for multi crystalline 330-335 W modules, while for Mono-perc modules of 430-435 W output, the spot rates are hovering closer to 25 cents per watt. Higher output modules over 500W have all crossed or are flirting with the 30 cent/watt levels, something that no developer would have considered a possibility back in 2020.

While many Chinese module and cell manufacturers have cut back on production due to the spike in polysilicon prices, the situation has been worsened by the cuts mandated due to the ongoing energy crisis in China. Thus, overall production is also likely to slump, making it clear that the price jumps will not really benefit even the China-based manufacturers for now.

While global research firms await further clarity, we have started hearing the first murmurs of the impact of these disruptions on solar manufacturing and supplies all through 2022. Multiple new capacity expansions planned by firms across the value chain, including in India, will only come online by the second quarter of 2022 and beyond, all the way to 2024. In the meantime, the crisis, which is expected to continue through at least December in China, will continue to exact a heavy toll on the vast base of manufacturing that is China centered.

For manufacturers in India, the case for calling out for a duty regime to replace the safeguard duty regime thus seems weaker for now, even though the government seems committed to its ‘scheduled’ tax increases on imports from the next financial year.

The hope among many industry watchers that renewables would get a further push due to the high costs of fossil fuels and gas in particular, will also be belied by these rising costs of solar plants.