The price of solar modules has surged to nearly 0.9 CNY per watt, raising questions about the sudden recovery of the photovoltaic industry, which was previously grappling with challenges. Just a few months ago, the industry was struggling with prices below production costs, but since February, leading manufacturers have initiated significant price increases. According to the latest data from InfoLink, the spot price of mainstream distributed solar modules reached 0.8 CNY/W in March, marking a rebound of over 33% from the low of 0.6 CNY/W at the end of 2024. Longi Green Energy (SH:601012) reported prices for their Hi-MOX10 anti-dust modules reaching between 0.85 and 0.9 CNY/W, the highest in nearly two years.
On March 20, InfoLink announced that the price of distributed solar modules has increased significantly, with execution prices for TOPCon modules now between 0.68 and 0.8 CNY/W, averaging 0.73 CNY/W. HJT modules are priced around 0.76 to 0.85 CNY/W, while BC N-TBC modules are priced between 0.73 and 0.82 CNY/W. Additionally, prices for upstream N-type solar cells, silicon wafers, inverters, encapsulants, EVA, and photovoltaic glass have also seen notable increases. For instance, the price of 182*210mm TOPCon solar cells has risen for five consecutive weeks, with an average increase of 0.05 CNY/W.
Furthermore, G12RN silicon wafers have experienced two price hikes in March, totaling 0.1 CNY/W. The price of photovoltaic-grade EVA has increased by 248.57 CNY per ton in just two weeks. InfoLink also reported that silicon material prices are expected to rise, with projections for March ranging between 39,000 and 42,000 CNY/ton.
Amidst overcapacity, fierce competition, and low-price sales, the rapid turnaround of the photovoltaic industry has surprised many. Does this indicate a recovery for the solar sector? Will prices plummet again below production costs after the installation rush ends?
As analysts debate when the photovoltaic industry will emerge from its winter, solar modules have reportedly sold out. Longi Green Energy’s China President, Niu Yanyan, mentioned that all types of their module products are currently in short supply. Major companies like Trina Solar (SH:688599), Tongwei Co., Ltd. (SH:600438), and Canadian Solar (SH:688472) have also seen significant depletion in the inventory of popular module models, with production lines operating on a “just-in-time” basis. Delivery times vary from one week to two weeks, and some companies have reported orders extending into the second quarter.
To meet market demand, solar production facilities that recently laid off staff are now rapidly hiring again. Leading companies are in high demand, and even smaller firms are busy fulfilling orders. A medium-sized module factory in Jiangsu is dispatching 300 vehicles daily but still cannot meet demand. A third-tier company in Hebei is operating all production lines around the clock, with orders extending beyond April.
Screenshots circulating among traders show that all brands of module futures have ceased taking orders and are only accepting spot orders, with reminders not to ask for prices, but simply to inquire about availability. Some individuals have rushed to factories only to find long lines waiting for their turn, and some have waited for two days without receiving their orders.
Traders hoarding stock have exacerbated the situation, with one trader revealing they stockpiled half of their target. To secure immediate inventory, various stakeholders are employing different strategies, including leveraging relationships to jump the queue. Some are even willing to consider products that were previously outside their preferred range. Lower-tier products from leading manufacturers are being sold off quickly, with shipments expected within 15 days.
Many orders for popular modules priced below 0.68 CNY/W have been canceled by manufacturers, prompting customers to pay additional fees for delivery, and in some cases, even more to expedite orders. For customers urgently needing modules, other options are limited, as prices below 0.7 CNY/W are increasingly rare. Some traders have begun applying for refunds due to the delays, with reports of significant project losses. Legal actions have also emerged against traders from dissatisfied clients.
In light of supply contract violations, issues with rebranding are also surfacing. Trina Solar and Aiko recently issued statements warning that purchasing modules from unofficial channels could pose serious risks to product quality, after-sales service, and user rights. An industry insider noted that due to previous production restrictions, large manufacturers temporarily cannot keep pace with demand and have turned to outsourcing. For these contractors, market prices above 0.7 CNY/W are more appealing than the 0.65 CNY/W they receive for manufacturing.
The surge in module prices is largely attributed to changing supply and demand dynamics. This shift is fundamentally rooted in the industry’s experience of deep reductions in production capacity and low inventory levels, followed by a sudden market explosion. Analysts attribute the current market surge to two main factors: domestic policy changes and a recovery in overseas markets.
The domestic policy changes include the National Energy Administration’s release of the “Management Measures for the Development and Construction of Distributed Photovoltaic Power Generation” in January and the National Development and Reform Commission’s guidelines in February aimed at deepening the market-oriented reform of new energy grid pricing. The former sets May 1, 2025, as the cut-off date for old and new policies, while the latter emphasizes that new projects must enter the market for trading, creating a more favorable environment for existing projects.
As an example, a rooftop project in Chengdu may experience a 25% drop in its internal rate of return (IRR) and a four-year extension in payback time if it delays grid connection until May. This has triggered a wave of installations aimed at the deadlines of April 30 and May 31.
Moreover, the overseas market is also beginning to recover, particularly in Europe, where inventory depletion has occurred, and several new projects are lined up, creating optimism for the European market in 2025. The photovoltaic procurement confidence index has surged, with experts predicting that the installed capacity in Europe could double by 2025. This has provided manufacturers with the confidence to increase prices, as the average price of photovoltaic modules in Europe surged by 5% to 10% compared to the same period in 2024.
Despite the positive signals from these two developments, the entire Chinese photovoltaic industry has reached a consensus on limiting production to maintain low operational rates after experiencing significant losses in 2024. The inventory of N-type silicon wafers has adjusted to 1.6 to 1.8 billion pieces, while the inventory of solar cells stood at 7.85 GW as of February 5. The inventory of modules in early January was under 50 GW. Following the sudden market surge, inventory has quickly been depleted.
The supply shortage of modules has influenced prices, sparking a buying frenzy among traders and further tightening supply. InfoLink reported that from January to March, domestic module production was carefully controlled, with a significant decrease in overseas inventory, especially for older models. Meanwhile, the limited volume of shipments to overseas warehouses in January and February has led to shortages of new, popular models.
Additionally, both distributed and centralized projects from state-owned enterprises are racing to connect to the grid before April 30, which further strains the supply for distributed markets.
Although the price increases resulting from this installation rush will likely benefit solar companies’ profits in the first and second quarters, providing a rare opportunity for recovery after significant losses last year. Public information indicates that due to recent price hikes in upstream materials, the minimum production cost of solar modules has surpassed 0.72 CNY/W, with a potential profit margin of 0.08 CNY per watt if sold at 0.8 CNY. Based on the shipment rankings of the top four module manufacturers (JinkoSolar, JA Solar, Trina Solar, and Longi Green Energy), with a total shipment of 147 GW, this could yield approximately 1.176 billion CNY in profits. While this profit may seem limited compared to last year’s losses, the positive signals it sends are invaluable; leading solar companies might collectively achieve profitability in the first half of the year.
However, the price increase is not entirely beneficial for the photovoltaic industry. If the price stabilizes at 0.8 CNY/W, while it alleviates financial pressures for leading companies, it could also revive outdated production capacities that should be phased out, undermining efforts to reduce excess capacity in the industry. The current question is whether the price of 0.8 CNY/W can be sustained. Some industry insiders suggest that large manufacturers are intentionally holding back to drive prices higher.
InfoLink statistics indicate that to meet supply needs, the industry’s operating rate increased by 24% in March, with expected production reaching 52 GW, which should alleviate the current supply-demand tension soon. However, another industry observer stated that sustaining price increases will be challenging, and a decline in prices might follow soon. Brands lacking robust distribution channels have refrained from raising prices, indicating that raw material costs can support current pricing. The top ten brands will soon replenish their supply, and to swiftly clear their inventories, attractive pricing will likely be introduced. Meanwhile, contract manufacturers are also releasing low-priced orders, which will impact the prices of branded products.
From the downstream market perspective, some household brands have already begun winding down operations, halting orders and shipments. “The highest price acceptable to EPCs is around 0.8 CNY, and anything higher is unfeasible,” noted one dealer, who has stopped increasing stock and started reducing inventory for delivery. Some insiders believe that excessive stockpiling by distributors has outpaced actual demand, which will likely lead to price reductions as distributors deplete their inventories. InfoLink predicts that the supply chain’s rising trend may persist until mid to late April, while others suggest that normal supply levels may not return until June or July, as many projects will first install a portion of their modules to meet the April 30 deadline and later complete the installations.
Regarding future prices, optimists predict that they may stabilize around 0.7 CNY/W in the second half of the year, while pessimists warn of a potential drop back to the 0.6 CNY/W range. It’s noteworthy that despite large-scale hiring by factories during this price surge, most new positions are for temporary workers, with trial periods ending around May 31. This suggests that major manufacturers do not foresee the sustainability of this price increase. Several industry professionals have conveyed to the media that, despite significant capacity reductions not yet being completed, the industry is not yet at a recovery stage. “After the installation rush, if there’s no significant market growth, prices will surely drop, leading to just a few months of profits. The sales volume in the second half of the year will depend heavily on the overseas market,” commented one industry expert.
