The problems of the solar supply chain, which began last year with high prices and shortages of polysilicon, persist into 2022. But we already see a sharp difference from previous forecasts that prices will gradually decline each quarter of this year. Alan Tu of PV Infolink explores the solar market situation and offers insights.

From pv magazine 05/2022

Overall, demand in the second quarter may be driven by distributed generation and some utility projects in China, while strong modules in Europe are increasing amid an accelerated transition to energy and stable demand from the Asia-Pacific region. On the other hand, the US and India are expected to reduce demand respectively due to the investigation against circumvention and high BCD rates. However, demand from all regions combined is 52 GW, which is slightly higher than in the first quarter.

At current price levels, China’s guaranteed installed capacity will stimulate the attraction of stocks from utility projects in the third and fourth quarters, while distributed generation projects will continue. Against this background, the Chinese market will continue to consume large volumes of modules.

The outlook for the US market will remain unclear until the results of the anti-circumvention investigation are published in late August. In Europe, there is still bullish demand, with no obvious high or low seasons throughout the year.

In general, demand in the second half will exceed the figure in the first half. PV Infolink predicts gradual growth over time, reaching a peak in the fourth quarter.

Polysilicon deficiency

As shown in the chart (left), the supply of polysilicon has improved compared to last year and is likely to meet the demand of end users. However, InfoLink predicts that supplies of polysilicon will remain short due to the following factors: First, it will take about six months for the new production lines to reach full capacity, which means that production is limited. Second, the time to release new capacity to the grid differs from manufacturer to manufacturer: capacity increases slowly during the first and second quarters and then increases markedly in the third and fourth quarters. Finally, despite continued production of polysilicon, the revival of Covid-19 in China has disrupted supplies, leaving it unable to meet demand from the plate segment, which has enormous capacity.

Raw material price and specification trends determine whether module prices will remain up. Like polysilicon, it seems that EVA particle production could meet demand in the modular sector this year, but equipment maintenance and a pandemic will lead to an unbalanced link between supply and demand in the short term.

It is expected that supply chain prices will remain high and will not decline until the end of the year, when new production facilities of polysilicon will be fully available. Next year, hopefully, the entire supply chain can be restored to a healthy state, allowing module manufacturers and system vendors to take a deep breath. Unfortunately, maintaining a balance between high prices and strong demand remains a major topic of discussion throughout 2022.

About the author

Alan Tu is a researcher at PV InfoLink. It focuses on national policy and demand analysis, supporting the compilation of PV data for each quarter and exploring regional market analysis. He is also involved in researching prices and production capacity in the cellular segment, reporting genuine market information. PV InfoLink is a provider of analytical data on the solar photovoltaic market, focusing on the PV supply chain. The company offers accurate quotes, reliable information about the PV market and a database of supply and demand in the PV market. It also offers professional advice to help companies stay ahead of the competition in the market.

The views and opinions expressed in this article are those of the authors and do not necessarily reflect the views of pv magazine.

This content is copyrighted and cannot be reused. If you want to cooperate with us and want to reuse some of our content, please contact us:

Previous articleTesla is recalling cars because of the problem of overheating – screens, not batteries
Next articleSuzuki, Maruti Suzuki, IIT-Hyderabad demonstrate a demo version of “technology to everything” communication technologies