Solar Panel Material Price Hits Highest in a Decade in China

Jun 22, 2022 by Bloomberg
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Polysilicon prices rose above last year’s high amid strong demand and production halts.

The price of a key material for solar panels soared to the highest level in more than a decade in China, raising the cost of clean energy just as the country rushes to add more renewable power to reach climate goals.

The average cost of the most expensive grade of polysilicon rose to 273.1 yuan ($40.62) per kilogram on Wednesday, according to the China Silicon Industry Association, surpassing last year’s high of 272.2 yuan. Prices for the ultra-conductive material last year reversed a decade of steady declines to hit the highest level since 2011 as demand surpassed producers’ installed capacity. The gains have been aggravated this month by production halts caused by reasons including power rationing, according to a statement from the industry association.

Global demand for solar panels has risen more than expected this year with China’s push to build more renewables in desert areas and Europe’s urgent need to reduce reliance on Russian gas. Solar cell and module exports from China to Europe this May increased 127% from the previous year, analysts at Daiwa Capital Markets said in a research note on Tuesday. 

READ: China’s Solar Industry Reels as Material Cost Nears Decade-High

Higher polysilicon prices are raising costs of solar panels, squeezing profits of major manufacturers and developers, and have already led to the cancellation or delay of some rooftop projects in China. More polysilicon capacity is expected to come online in the fourth quarter this year, which should drive down prices, according to BloombergNEF’s lead solar analyst Jenny Chase.

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By Rob Verdonck

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