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Solar prices rise after a long time of declining due to shortage of capacity

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Solar Component prices Rise

Solar component prices are showing a slight increase after a very long time of declining. The last time prices increased was in last 2011, when the German FIT change led to a massive surge in demand which could not be met by the capacity at that point of time. Since then prices have continued to fall without a single quarter of increase. This is surprising, considering the exponential growth seen in both absolute and relative growth in solar demand. The last 2 years have seen a big moderation in capacity increases, as most Tier 2 producers went bankrupt and even Tier 1 players have been careful in adding capacity due to capital constraints. The solar industry still operates on thin margins, despite a big increase in industry size. Competition still remains quite intense and many companies are still reporting losses. So it is surprising to many industry watchers that solar component prices are seeing an increase now. This is due to a rapid increase in demand from major countries such as China, Japan and USA.

The capacity shortage is most acute in the wafer part of the supply chain. Note wafers have become the least loved part of the supply chain, with two of the largest producers Renesola and LDK moving to become integrated solar panel companies due to the low margin in the wafer business. LDK is now bankrupt, while Renesola is also facing distress due to debt. GCL, Green Energy, Longi are some of the large players still remaining in business with their main focus being the production and selling of wafers. Wafer capacity has also become constrained as major panel makers like Trina, Jinko and Canadian Solar have not increased their wafer capacity in the recent past. These companies have mainly concentrated on building solar panel and cell capacities in SE Asian countries to avoid USA and European duties. There is around 55 GW of wafer capacity in Taiwan and China with 50 GW in China alone. Major wafer manufactures such as REC and Solarworld have shut their pure play wafer operations and there is negligible supply in the West.


Prices for a solar-grade polycrystalline silicon wafers have risen to US$0.835-0.840 currently due to strong demand, and are likely to further rise to US$0.85-0.87 in November, according to industry sources.In contrast, prices for monocrystalline models have continually dropped because demand in Europe and Japan, two main markets, has decreased due to depreciation of the Euro and Japanese Yen against the US dollar, the sources said. For example, prices for M2-size monocrystalline wafers have slipped to US0.93-0.94, the sources indicated.


Sneha Shah

I am Sneha, the Editor-in-chief for the Blog. We would be glad to receive suggestions, inputs & comments on GWI from you guys to keep it going! You can contact me for consultancy/trade inquires by writing an email to

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