The recent surge in demand for photovoltaic installations has led to fluctuations in supply chain prices. According to the latest report from InfoLink Consulting, the prices of products in the downstream segments of the industry have been consistently rising. This increase is driven by strong demand resulting from the upcoming “430” and “531” policy deadlines and rising costs in the battery segment.
As of now, the price of silicon wafers has been on the rise, with some high-priced orders for modules appearing in the range of 0.78 to 0.80 yuan per watt, although large-scale transactions have yet to materialize. InfoLink Consulting noted that with the conclusion of the policy deadlines, and considering the manufacturers’ transportation and delivery cycles, the overall prices of battery cells are expected to soften after mid-April as domestic demand decreases.
Recently, the domestic distributed photovoltaic market has reached two critical policy milestones—April 30 (the “430” deadline) and May 31 (the “531” deadline). These dates mark the transition from old to new policies and the full market entry of new projects. April 30 serves as a cut-off for adjustments to grid access methods and feed-in tariffs for commercial distributed photovoltaic projects. To secure existing subsidies and pricing benefits, companies are rushing to complete their registrations and connect to the grid before this date, fueling a rush for existing projects. On May 31, new distributed photovoltaic projects will enter the electricity market, with all generated power subject to market transactions without national subsidies.
A representative from Aiko Solar (600732.SH) explained that due to satisfactory compliance with industry self-discipline, the operating rates across various segments have remained relatively low, alleviating supply-demand tensions and contributing to a sustained price increase across the industry chain. Additionally, the impending market transition has prompted domestic clients to exhibit some rush behavior, further accelerating the rise in module prices.
On March 20, during the inaugural BNEF Beijing Summit, Zhang Haimeng, Vice President of Longi Green Energy (601012.SH), expressed concerns over the significant market fluctuations. He stated that companies do not favor scenarios where prices dramatically drop by 40% to 50%, as witnessed last year, nor do they welcome the unpredictable price surges experienced this year. He emphasized that companies can only effectively manage their production schedules, raw material inventories, and product stock levels.
According to Zhu Daocheng, President of JA Solar Technology (002459.SZ), the photovoltaic industry is on the brink of capacity clearing. He noted that during this period, manufacturing companies, especially those producing modules, are reluctant to incur losses at this critical stage. Upstream companies aim to maintain healthy cash flow, while leading module manufacturers prefer to make more measured decisions.
It is noteworthy that some industry perspectives suggest that the recent recovery in the photovoltaic sector’s performance is primarily driven by the demand surge resulting from the key policy deadlines for distributed and new energy markets, with the potential for a significant drop in market demand following these rush periods.
In discussing the current state of the photovoltaic industry and looking ahead to market conditions in the second half of the year, Zhang Haimeng remarked that the phase of “burning cash” may be coming to an end. Since last year, the bidding prices for centralized photovoltaic plants have been aligning closely with production costs. This trend implies that both large and small companies are no longer in a position to irrationally underbid. However, he added that while the cash-burning phase may conclude, it will still take some time before industry players begin to generate profits based on the current market supply and demand dynamics.
