Sudden Price Increase in the Photovoltaic Industry Amid a Rush for Installations
Recently, the photovoltaic (PV) industry has seen a surge in activity, reminiscent of a bygone era. Reports indicate that a factory in Chuzhou is actively seeking to purchase a large quantity of 182-sized solar cells, with a representative named Xia posting multiple requests on social media platforms for these components, stating, “We are looking to buy a large number of 182 solar cells. If you have resources, please contact us.” This scarcity of solar cells and tight supply of modules has led to a peculiar situation in the industry, often referred to as a “stock shortage.”
Wang Yang (a pseudonym), a dealer selling modules from major manufacturers like Longi, JA Solar, and Jinko, advised clients to place orders quickly to secure existing stock, stating, “Don’t get caught up in the minor price differences; locking in orders is crucial.” With new policies coming into effect on April 30 and May 31, a rush for installations has emerged, resulting in a tense supply situation across the entire industry chain. Some downstream dealers report having only minimal stock, and larger modules are mostly out of stock, necessitating early reservations.
Industry insiders predict that prices for components could surpass 0.9 yuan/W as demand accelerates. In January, two significant policies concerning distributed photovoltaics were announced: the Management Measures for the Development and Construction of Distributed Photovoltaic Power Generation and the Notice on Deepening the Market-oriented Reform of New Energy Grid Pricing. According to the management measures, projects completed and connected to the grid before April 30 with capacities below 20 MW will still be eligible for full grid connection. After April 30, projects will only be able to choose self-consumption or partial grid connection, eliminating the option for full grid sales.
The Notice also stipulates that starting from May 31, 2025, all new distributed photovoltaic projects must trade electricity through the power spot market. This makes May 31 a critical date for new projects entering the market. These policies will have a direct impact on the profitability of photovoltaic power stations, which primarily rely on revenue from electricity generation, policy subsidies, carbon trading, and asset appreciation. Faced with the elimination of subsidies post-grid connection and uncertainties in market pricing, some companies are rushing to complete installations before the policy changes to secure expected profits.
As reported by SMM PV Insight on March 20, current market prices for modules show that the mainstream transaction price for N-type 182mm modules is between 0.704 yuan and 0.722 yuan/W, an increase of 0.01 yuan/W, while N-type 210mm modules range from 0.719 yuan to 0.737 yuan/W, up by 0.005 yuan/W. The price for Topcon distributed modules stands at 0.764 yuan to 0.780 yuan/W. March saw a 35% increase in overall production compared to the previous month, with more orders being delivered.
With many distributed installation orders, component manufacturers are largely focused on reducing inventory and are actively accepting orders. According to InfoLink, the rush for installations has led to a significant increase in orders during March and April, particularly in the distributed market. Reports indicate that some module prices have reached 0.8 yuan/W. A representative from Trina Solar mentioned, “The price for distributed photovoltaic modules has increased by 0.05 yuan to 0.06 yuan/W, with some regions seeing prices as high as 0.8 yuan/W,” although they did not specify which regions.
On March 21, a representative from Longi Green Energy indicated that most companies are now quoting prices above 0.85 yuan/W. When inquiring about the price of available components, Wang Yang mentioned that the current price for a 640W module (2382×1134×30) is around 0.83 yuan/W, with logistics costs bringing the total to approximately 0.85 to 0.86 yuan/W. Xia from the Chuzhou factory commented on the high demand for solar cells due to the new policies, resulting in a slight price increase for modules. When asked if prices would continue to rise, representatives from Trina Solar and Longi Green Energy did not provide specific answers. However, Wang Yang confidently stated, “I guarantee that prices will definitely rise, breaking through 0.9 yuan/W, with a peak around 0.95 yuan. The situation will depend on future developments.”
Dealers emphasized the urgency of securing available stock, as the primary concern is ensuring delivery rather than price. Wang Yang explained, “The main issue now is not the price, but whether we can ensure delivery. In fact, we are hesitant to accept orders for existing stock.” He indicated that there are only about 10,000 units of available stock due to shortages of high-power modules, necessitating reservations with manufacturers. However, this raises questions about whether factories can fulfill their commitments. “We are taking a risk, betting on whether major manufacturers can deliver,” Wang Yang added.
Wang Yang also pointed out that locking in prices through futures contracts poses a risk, as manufacturers may unilaterally increase prices even after contracts are signed. Customers may then have to either accept the price hike or wait months for a refund, which many find unacceptable. “If manufacturers are willing to breach contracts with dealers, how can dealers be expected to honor contracts with customers?” he remarked.
Additionally, reports have surfaced about the emergence of low-quality solar cells from smaller manufacturers entering the market, along with unregulated “private label” components. Major companies like Aiko Solar and Trina Solar have issued warnings about the potential safety risks associated with products from unauthorized channels.
Furthermore, price increases are not limited to modules and solar cells; materials throughout the supply chain, including silicon, wafers, encapsulants, and glass, are also seeing price hikes. A professional in the photovoltaic industry noted that the price surge is influenced by upstream production cuts in polysilicon. Major companies have taken self-regulatory actions, with a significant reduction in polysilicon production contributing to this wave of price increases. In December 2024, Tongwei Co. and Daqo New Energy announced plans to implement technical upgrades and orderly production cuts for some high-purity polysilicon projects.
On March 20, a report from Xinda Futures indicated that the reduction in polysilicon output in February led to approximately 90,000 tons, which, under expectations of supply-side reform in the photovoltaic sector, supports prices. Shanxi Xiangbang Technology Company, a supplier of encapsulants, stated that their orders are saturated for the first quarter, with some orders extending to the end of the second quarter.
Some industry experts express concerns that the rush for installations may have borrowed demand from the latter half of the year. They suggest that the impact of the current rush on annual installation totals may be limited. On March 21, Lü Jinbiao, joint secretary-general of the SEMI China PV Standards Committee, noted that the introduction of market-oriented pricing policies for renewable energy reflects advancements in manufacturing technology and the industry’s capacity to compete with traditional fossil fuels. He emphasized, “The demand driven by the rush for installations is merely a timing adjustment, and there is no significant increase in annual totals.” He stated that maintaining self-discipline in the industry and avoiding aggressive price competition are crucial for long-term stability.
Overall, while there have been noticeable short-term price fluctuations, the long-term outlook remains cautious. Industry leaders, including Longi Green Energy’s founder, Li Zhenguo, have commented that the recent price increases are more of a temporary correction amidst supply-demand imbalances, and the overall health of the industry should not be overstated.
