Since the fourth quarter of 2020, the price of a solar module globally has increased by 30 percent, which has led to delays with solar tenders and the deferment of projects. When trying to pinpoint the start of rising solar material prices, the current cost increases can be traced back to mid-2020 when production from two major silicon manufacturing plants in China halved.
According to Bernreuter Research, the share of polysilicon in panel costs has increased from 16 per cent to 35 percent this year.
“[There was also] an increase in the costs of other raw materials and freight costs globally, and the general increase in demand for solar, as more governments embrace this cheaper, cleaner source of electricity,” says Ayham Mkalalati, Head of On-Grid Business at SirajPower.
While the cost of the raw material is undisputed, some believe that the response of manufacturers increased the impact of polysilicon rises.
“A rise in the cost of the raw material will not have an equivalent increase in its overall cost,” says Professor Tadhg O’Donovan, Head of the School of Engineering and Physical Sciences at Heriot-Watt University Dubai. “The main reason for the recent price hike of polysilicon seems to be rather economic.”
The research found that the price hike was a result of panic buying by manufacturers of wafers, cells and modules who, in the hope of hedging against further price increases, opted to buy as much polysilicon as possible. However, O’Donovan says that wafer, cell and module makers can either accept lower margins or pass on the higher costs of using polysilicon onto their final customers.
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