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Solar component prices go up across the supply chain due to supply tightness

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We at Greenworldinvestor have been talking about the increasing prices of solar wafers in the last few months, as wafer capacity was not being added by major solar companies in the last few years. Solar wafer prices have increased from around 80c/piece to around 88c/piece now for multicrystalline wafers. Cell and panel prices which were subdued are also seeing an increase in prices now. Note, Chinese solar panel makers have increased the prices by around 3% to 64c/watt, from around 60-62/watt. This has been done as there is a surge in demand from China, as the country looks to reduce the FIT in 2015 end. The demand surge should go till the first half of 2016 when the plant construction will be allowed at the old FIT prices. Note this price increase reminds me of the price increase, when the German FIT used to be decreased every year on Jan 1. This led to a massive increase in German demand during Q4 and companies such as Trina and Yingli used to make gross margins of 40%. Those days are not coming back, as competition has increased manifold. Polysilicon which used to be the principal constraining factor in the supply increase has also reached the oversupply situation. Poly prices have not increased though wafer, cell and panel prices have increased.

China-based makers, in view of continued tight supply, plan to increase quotes for solar-grade polycrystalline silicon wafers from US$0.85-0.86 currently to US$0.88 in January, according to industry sources in Taiwan.China-based makers have hiked prices from US$0.83-0.84 in November to US$0.85-0.86 currently, the sources said.

Source – DigiTimes

The continued tight supply of solar wafers is mainly due to strong demand for PV modules in the China market, the sources indicated. The China government has extended the deadline for 2015 feed-in tariffs approved by the end of 2015, so they need to be completed and on grid by the end of June 2016. This is expected to cause rush for PV installation during the fourth quarter of 2015 and the first half of 2016, the sources explained.

I do not think that the prices of solar components will increase much as capacities are coming up in 2016 and demand should be lower in 2016, as the US ITC has been extended. A large number of solar projects around the world have been bid based on low solar panel prices and will not be feasible at higher prices. The demand will automatically get cannibalized if the panel prices increase too much. Also setting up capacities is not that capital intensive or time consuming these days and you can reasonably expect capacities to come up in 6-9 months, if there a massive demand surge.


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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