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TrendForce says solar module, cell, and wafer prices will rise in the second quarter as China accelerates installations in response to upcoming regulatory changes. It notes that prices are expected to decline in the third quarter as demand declines. Upcoming changes to solar energy incentives in China are boosting short-term demand and tightening supply, according to Taiwan-based consultancy TrendForce. Earlier this year, the Chinese government announced new pricing regulations for solar and renewable energy that will eliminate fixed feed-in tariffs for solar installations starting in June. Analysts expect this policy change to lead to an increase in installations, especially of distributed solar systems. According to TrendForce, this short-term surge in demand will create a moderate demand peak in March and April, which will peak in the second quarter and drive up prices throughout the solar energy supply chain. According to the companys analysis, the rise of distributed generation installations has significantly increased demand for modules, leading distributors to stockpile inventory. Average module prices are at 0.70 yuan (0.096 USD)/W, with first-tier suppliers reaching 0.73 yuan/W. Although prices remain firm for now, TrendForce predicts a sharp drop in demand once the installation rush ends. According to its forecasts, intense competition in the third quarter will drive module prices back down to 0.70 yuan/W or lower. According to TrendForce, rising module prices have also boosted solar cell prices. The company forecasts that prices for M10L tunnel oxide passivated contact (TOPCon) and G12 TOPCon cells will increase by nearly 1.7% month-on-month in April, while G12R TOPCon cells could see a 6.67% increase. TrendForce expects this upward trend to begin reversing in May, with increased competition driving price declines into the third quarter. Solar wafer prices are following a similar trend, with prices forecast to rise by more than 3.5% month-on-month in April before falling sharply in the third quarter due to falling demand. Polysilicon prices will also rise in the second quarter, with TrendForce forecasting 45 yuan/kg. However, the company anticipates a significant contraction in demand in the third quarter, once the surge in installations subsides. Given that electricity costs account for around 30% of raw material manufacturing, producers are likely to increase production during the summer hydropower season to take advantage of cheaper electricity, TrendForce notes. This could lead to oversupply and push prices down. |
