A new wave of photovoltaic installations has driven up supply chain prices
On April 2, 2025, the photovoltaic market is experiencing a fresh surge in demand, leading to a rebound in the prices of solar cells and modules. According to the latest weekly report from InfoLink Consulting, the price of modules has risen to approximately 0.74 to 0.75 yuan per watt, with significant transactions recorded. Additionally, high prices between 0.78 and 0.79 yuan per watt have also seen some transactions. This marks the first noticeable price rebound for modules in nearly a year.
Analyst Chen Fei from Ruizide Energy notes that the photovoltaic supply chain prices have been operating below the industry cost line for some time. Since last year, the upstream polysilicon segment has entered a production control phase, improving the supply-demand balance compared to the second half of last year. At the end of last year, under the guidance of industry associations, photovoltaic supply chain companies collectively signed a self-discipline agreement to voluntarily limit production.
This policy-driven surge in installations will temporarily increase demand for photovoltaic products. Due to the longer construction period for centralized power plants, the demand for components from distributed power stations will primarily support photovoltaic module prices in the first half of the year. The production limits in the polysilicon segment will help optimize supply-demand conditions across the supply chain, and the temporary recovery in demand will contribute to price stabilization.
According to TrendForce, the publication of the “Measures for the Management of Distributed Photovoltaic Power Generation Development” and the “Notice on Deepening the Market-oriented Reform of New Energy Grid Connection Prices to Promote High-quality Development of New Energy” has stimulated a strong installation rush in the Chinese photovoltaic market. This has resulted in a concentrated release of terminal demand, causing a surge in module demand and temporarily alleviating inventory pressure. In the short term, the supply of modules is insufficient, leading to rising prices.
Peng Peng, Secretary-General of the China New Energy Power Investment and Financing Alliance, believes that the recent increase in photovoltaic module prices is undoubtedly stimulated by the aforementioned notice, which has resulted in a significant rise in equipment procurement demand as project developers aim for rapid grid connection. This installation rush is expected to influence the entire photovoltaic supply chain pricing until the end of April or early May.
InfoLink Consulting’s analysis of module manufacturers’ shipment data shows a slight increase in domestic orders, primarily concentrated in distributed projects, especially in industrial and commercial sectors. The issuance of the “Notice on Deepening the Market-oriented Reform of New Energy Grid Connection Prices” has further propelled the installation rush in the distributed market, leading to a roughly one-cent increase in spot prices for domestic distributed components. Prices for low-cost sales are also continuing to tighten, with some manufacturers reporting a decrease in orders below 0.66 yuan per watt.
Looking ahead, InfoLink Consulting indicates that as the deadlines approach, the strong demand for spot orders from domestic distributed projects is accelerating shipment rhythms, resulting in high demand for solar cells. Major manufacturers are expected to implement various production increases next month. However, given the challenges associated with restarting previously suspended battery factories and existing debt pressures, the anticipated supply increase will likely be led by top manufacturers.
Regarding modules, InfoLink Consulting believes that the installation rush may lead to fluctuating demand patterns between the first and second halves of the year. Currently, manufacturers are cautious in their production planning, resulting in a healthy inventory level for modules. Production scheduling for April is expected to rise further, and visibility into orders for module manufacturers is improving rapidly. With a notable increase in domestic orders for modules in March and April, some popular models may experience shortages.
Chen Fei also pointed out that the photovoltaic supply chain is unlikely to clear out excess capacity in the short term, thus raising uncertainty about whether prices can be sustained after the installation rush. Future policies or measures may be required to fundamentally raise industry competition thresholds and eliminate outdated and cost-inefficient production capacity.
InfoLink Consulting further anticipates that the price trend for N-type solar cells will see an increase driven by short-term demand from policies. However, as the rush period concludes, and considering manufacturers’ transportation and delivery cycles, the overall price of cells may soften after mid-April due to a decline in domestic demand, although specific price movements will depend on supply and demand conditions for different sizes.
TrendForce notes that most current installation projects are distributed, which will indeed bring forward some demand. Once the policy window closes, new projects will need to establish electricity prices through market transactions, likely dampening new demand in the second half of the year due to lower profit expectations. Unclear policy details in some provinces may also exacerbate hesitance in the market. It is anticipated that this installation rush will gradually weaken by June.
Regarding the expected scale of new photovoltaic installations this year, Wang Bohua, Honorary Chairman of the China Photovoltaic Industry Association, stated that by 2025, due to the influence of policies such as the management measures for distributed photovoltaic generation and market-oriented reforms in new energy pricing, there is a degree of market hesitation which adds uncertainty to installation expectations. However, overall, China’s new photovoltaic installation capacity is expected to remain robust, estimated between 215 and 255 GW.
InfoLink Consulting believes that centralized installations in 2025 will primarily derive from the “14th Five-Year Plan” and other large projects. Currently, Xinjiang has achieved its installation targets, Gansu has exceeded 90%, and Inner Mongolia and Shanxi have also surpassed 60%. Remaining projects are expected to connect to the grid within the year. Even with the formal implementation of market trading, centralized projects will continue as planned to ensure timely completion.
By 2025, new installations in China are expected to be predominantly centralized, likely exceeding 60%, while household projects may stay below 10% and commercial projects around 30%.
Deng Simeng, Senior Analyst in Renewable Energy and Power Research at Ruizide Energy, notes that market-oriented pricing reforms in new energy indicate a shift from rapid growth to high-quality development in photovoltaic and wind installations. This year, numerous renewable energy bases and other projects outlined in the “14th Five-Year Plan” are on track, with a rush in distributed photovoltaic installations likely before May. Existing centralized projects are also accelerating to meet the June 1 deadline, with many provinces actively promoting the completion of renewable energy installation goals. The growth rate for installations this year is expected to remain high.
In the medium to long term, following the introduction of the new market-oriented policies, the profitability of renewable energy projects is expected to change. Coupled with factors such as energy absorption and grid capacity, long-term growth rates for wind and solar installations are anticipated to slow down compared to the “14th Five-Year Plan,” transitioning into a phase of stable growth.
