The Surge in Solar Energy Installations: Are We Entering a New Era?
In 2025, the solar industry is experiencing a surge in installations driven by policy changes, leading to a continuous rise in component prices, with segments like silicon wafers and solar cells showing signs of recovery. Following new regulations that necessitate market-based pricing for projects initiated after the “531” policy, companies are scrambling to secure installations to lock in price advantages. Industry self-regulation has alleviated some of the oversupply issues, but high inventory levels of silicon materials are hindering price increases. While short-term demand spikes are boosting revenues, the long-term sustainability remains uncertain, reminiscent of the cooling risks faced after the 2016 installation rush.
- Policy Drivers of Installation Surge: The “430” and “531” policies are pressuring companies to rush installations to secure favorable pricing for existing projects.
- Component Price Surge: Prices for TOPCon solar modules surged by 0.06 yuan per watt within two weeks, reaching over 0.8 yuan per watt, marking a 30-month high.
- Effective Industry Self-Regulation: Production and price controls have mitigated low-price competition, with the price of silicon wafers increasing by over 20% since the beginning of the year, and supply-demand gaps becoming apparent.
- Spread of Installation Rush Effects: Leading companies are extending order schedules to 15 days, with some component models completely sold out.
- Challenges in Silicon Inventory: Price increases in downstream sectors are struggling to be transmitted to the silicon segment, with companies focusing on stabilizing prices and reducing inventory.
- Uncertainty of Short-term Recovery: The stimulus effects of policies may be short-lived, with increased demand in the second half of the year becoming a crucial variable.
For the solar industry, the spring of 2025 appears to have arrived sooner than usual. Shortly after major solar companies reported significant losses for 2024, price increases have become the hottest topic in the market. It is also unexpected that, amidst oversupply, production quotas for silicon wafers and modules would be raised. Sources reveal that key stakeholders in the solar silicon and module sectors recently convened to reassess production quotas for the first half of the year, with increases of 1% to 3% noted each quarter. Some companies have reportedly exceeded their production targets amid the installation rush.
Since hitting a peak in prices in the fourth quarter of 2022, solar product prices have been on a downward trend for over two years. However, following the Spring Festival of 2025, as various segments of the solar industry chain resumed operations, prices for polysilicon, silicon wafers, solar cells, and modules have stabilized and even begun to rise. Among these, modules have emerged as the standout performers. Goldman Sachs highlighted in its latest report that February saw the first increase in solar module prices in 30 months, a rise of 0.4%. The firm also anticipates that the price rebound across the entire value chain may strengthen further in March.
Since March, terms like “price jumps,” “contract cancellations,” and “shortages” have become commonplace for industry professionals. Reports indicate that leading firms, including Trina Solar and JA Solar, have significantly depleted stocks of popular module models, with production lines operating in a “just-in-time” manner. The lead time for procurement has generally extended by an additional 5 to 7 days, reaching around 15 days.
One sales representative from a solar company expressed frustration, stating, “Prices are fluctuating so rapidly that I have to check prices daily when asked.” According to InfoLink, as of March 12, the average price for TOPCon bifacial dual-glass modules in China reached 0.73 yuan per watt, up 0.01 yuan from the previous week, a 1.4% increase. Prices for distributed projects continue to rise, with transactions beginning to occur in the range of 0.74 to 0.75 yuan. Manufacturers are even considering raising quotes to 0.8 yuan.
On March 14, SMM reported price increases for three models of distributed TOPCon modules—182, 210, and 210R—ranging from 0.015 yuan, with average prices reaching 0.748 yuan, 0.763 yuan, and 0.763 yuan per watt, respectively, hitting new highs in recent times. In just half a month, the price of modules has risen by 0.06 yuan per watt.
The recent surge in prices is linked to a policy-induced installation rush. On February 9, the National Development and Reform Commission and the National Energy Administration jointly issued a document that promotes the market-oriented pricing of electricity generated from renewable sources, including solar and wind, marking the transition to a market-based pricing mechanism. Projects initiated after the “531” policy will have their electricity prices determined through market competition, signaling the end of government-set pricing models.
Furthermore, on January 23, the National Energy Administration released guidelines for distributed solar power development, clarifying consumption models for various distributed solar projects. Following the “430” policy deadline, projects are now required to choose self-consumption or partial grid connection, eliminating the option for full-grid sales.
The combination of these two significant policy changes has directly led to the installation rush observed in the first half of this year. Industry participants are eager to secure “existing project” qualifications to take advantage of price differentials. This rush has also stimulated a rebound in module prices, dispelling the shadow of constant price declines. Since the Spring Festival of 2025, prices have been on a steady upward trajectory, with major companies confirming price hikes in the range of 0.02 to 0.05 yuan per watt.
One leading module manufacturer noted that recent orders for distributed modules are generally priced above 0.75 yuan per watt, with some orders even exceeding 0.8 yuan per watt. Longi Green Energy confirmed that the current average module price can reach over 0.8 yuan per watt, while Aiko Solar indicated its BC module pricing has also surpassed 0.8 yuan per watt. Areas with higher price guarantees are seeing slightly elevated module quotes, with some prices nearing 0.9 yuan per watt.
The recent continuous rise in solar product prices is not only driven by the installation rush but also reflects the initial successes of industry self-regulation aimed at curbing “malicious competition” and addressing oversupply issues. Since last October, industry self-regulation efforts have been underway, and with the collaboration of the government, industry associations, and leading enterprises, the oversupply situation in the solar sector has improved, leading to a significant price recovery.
As of January 8, InfoLink reported a 10% increase in N-type silicon wafer prices compared to the end of December. Subsequently, the price of 182*210mm N-type silicon wafers continued to rise, with price increases exceeding 20% in the early part of the year. Due to the strong demand spurred by the installation rush, a shortage of silicon wafer supply has emerged, with prices for 183N, 210RN, and 210N wafers being set at 1.2 yuan, 1.4 yuan, and 1.55 yuan, respectively, effective as of March 13.
The price trend for battery cells has also been promising this year, particularly influenced by new policies. As per the latest data from InfoLink on March 12, prices for N-type battery cells have increased, with average prices for M10, G12R, and G12 cells rising to 0.295 yuan, 0.32 yuan, and 0.30 yuan per watt, reflecting increases of 0.005, 0.02, and 0.005 yuan, respectively. Looking ahead, InfoLink Consulting expects that the overall prices for battery cells in March will continue to rise in tandem with increased component prices and adjustments in silicon wafer pricing.
However, within the solar industry chain, the silicon segment—which experiences the longest cycles and the most significant price fluctuations—has seen polysilicon companies initiating new rounds of contracts. Against the backdrop of rising prices downstream, polysilicon companies are considering upward adjustments in their pricing, with some high-priced dense material orders being settled. The highest and lowest prices for dense materials have increased since the end of last year, and prices for granular silicon have also seen some upward movement.
Amid expectations of an installation rush, with rising prices for components, battery cells, and silicon wafers, there is also an anticipation of price increases for silicon materials. Nevertheless, challenges persist due to high inventory levels at both upstream and downstream sectors, which complicate the price transmission from polysilicon to the silicon segment. Consequently, companies are focusing on steady pricing and inventory reduction.
In response to the sudden surge in installations, all segments of the solar industry chain are urgently ramping up production rates to meet order demands. According to the latest production data from Guojin Securities, the expected output for the polysilicon segment in March 2025 is approximately 108,000 tons, representing a 7.3% increase compared to the previous month, with corresponding rapid increases expected for silicon wafers, battery cells, and components.
Nonetheless, the persistent recovery in prices driven by policies may not be sustainable in the long run. Industry experts caution that the price increases are primarily a result of temporary installation surges influenced by policy changes. Whether these prices can maintain an upward trajectory will depend on market growth in the latter half of the year; otherwise, the price increases may not be sustainable. Reflecting on past experiences, the last installation rush led to a dramatic market downturn in the second half of 2016, following the “630” policy, where prices plummeted, installation enthusiasm waned, and profitability for companies sharply declined, exacerbating capacity clearance issues.
Although the price increases resulting from the installation rush can provide a direct boost to companies’ revenues, they must be approached with caution. According to estimates from the China Photovoltaic Industry Association, if the production volume for solar modules in 2024 reaches 588 GW, and prices rise by an average of 0.04 yuan per watt, the industry could see an additional revenue of approximately 23.5 billion yuan. However, there is a sober recognition that the installation rush could lead to a subsequent period of market downturn. Industry insiders have humorously remarked that the installation rush provides timely aid, but the duration and intensity of this aid remain uncertain. Others question whether the expanded capacity and inventory will become burdensome once the rush concludes.
Ultimately, the sustainability of price increases in the industry chain hinges on the improvement of supply and demand. The recent price corrections have been minimal, primarily reflecting a basic recovery from an imbalanced state rather than a robust recovery. The combination of domestic factors and changing policies may result in continued impacts from the installation rush in the coming months. Recently, Longi Green Energy’s president expressed similar sentiments, stating that while the short-term price rebound does not necessarily indicate a comprehensive improvement in the industry.
