Rising prices for solar modules could disrupt the sector for Business and Economic News

Solar power has become a major selling point (which reduces costs quickly) as a key source of energy that has become the fastest growing energy source in the world.

The prices of solar modules have risen by 18% since the beginning of the year after falling by 90% in the previous decade. The delay, which has quadrupled the cost of polysilization of key commodities, threatens to delay projects and slow down solar energy, as some major governments are eventually throwing their weight behind in an effort to slow climate change.

“The solar flare hasn’t been so bad for more than a decade,” said Jenny Chase, a solar analyst with BloombergNEF’s clean energy research group. “Developers and governments will have to stop expecting the sun to be much cheaper.” The BNEF dropped its forecast for solar construction slightly this year in a report last week, citing the rise in prices for internal materials as polysilicon.

Higher prices affect demand and may delay some large-scale projects, Canadian Solar Inc. said. the panel manufacturer said in a call for profit on Thursday. In India, it could affect about 10 gigawatts of projects, which is equivalent to more than a quarter of the country’s current capacity, Mint reported, citing unnamed developers. Large-scale projects in the U.S. could also be delayed, analysts at Cowen & Co said.

Projects that have not signed price agreements with energy-buying services may be delayed unless customers are willing to pay a higher rate for electricity, Xiaojing Sun Wood Mackenzie Ltd. according to a company analyst.

When it comes to the solar industry, time could not be worse. Renewable energy has finally become a champion in the White House and has announced ambitious climate targets across Europe and Asia.

In the midst of the crisis is polysilicon, an ultrafine form of silicon, the most abundant material on Earth in sand on the beach. As demand for solar industry modules was poised to meet expected growth, polysilicon producers were unable to keep up. According to PVInsights, metaloid purification prices hit $ 25.88 per kilogram, down $ 6.19 from a year ago.

The prices of polysilicon are expected to remain the same until the end of 2022, including Roth Capital Partners analyst Philip Shen.

The problem is not limited to polysilication. The solar industry faces “numerous rising supply chain cost challenges,” Maxeon Solar Technologies Ltd. said in April. panel manufacturers.

Solar panels are made with ultraconductive polysilicon ingots that are heated and purified with sand, cut into thin razor blades, wired into cells, and then mounted on roofs and mounted on panels that cover large areas.

Steel, aluminum and copper prices have also risen, as have freight costs. Solar microinverter supplier Enphase Energy Inc. has said it expects its shipment volumes to be limited by the availability of semiconductor components.

“Down the river of polysilicon, it’s very painful,” Xiong Haibo, vice president of the Canadian Sun, said at a conference in China, according to a report by Solarbe Industry. “Currently, no downstream company is profitable either and they are all reducing production.”

However, the disruption in the long-term downward trend in costs is offset by the continuous improvement in the efficiency of solar panels, said Nitin Apte, CEO of Vena Energy Pte, an independent Asia-Pacific renewable energy operator. . The company does not anticipate any delays this year in solar projects in Japan, Taiwan, Australia and India.

“I see it as a short-term situation, and some projects may see it eating into our contingencies,” Nitin said in an interview at his Singapore office. “We are not slowing down construction. We are blocking orders at the best prices we can get. “

In the longer term, the shortage is driving the construction of new polysilicon factories, which this month announced what would become the world’s largest facility in China.

“It could be expected that any material that has experienced polysilicon growth will continue to have the capacity injected into the system,” Nitin of Vena said. “The challenge is to adapt that capability to growth perfectly.”