Ten years of the cost of solar panels is being pushed back. An important marketplace that makes solar energy the fastest-growing energy source in the world – the rapidly declining cost – has hit rock bottom.
Solar module prices have risen by 18% since the beginning of the year after falling by 90% over the past decade. The reversal, caused by four times the cost of polysilicon for raw materials, threatens to delay projects and take solar power as a few governments are finally throwing their weight in an effort to reduce climate change.
“Solar flares have not been so severe for more than a decade,” said Jenny Chase, who leads the solar analyst and BloombergNEF energy research team. “Engineers and governments will have to stop expecting the sun to become too cheap anytime soon.” BNEF slightly lowered its solar construction forecast for this year in a report last week, citing prices of materials including polysilicon as one of the reasons.
“Higher prices affect demand and could delay major projects”, says panel founder Canada Solar Inc. said a profit call on Thursday. In India, about 10 gigawatts of potential projects, equivalent to more than a quarter of the country’s energy, Mint reported, cited unnamed engineers. Major American projects could also be postponed, say analysts at Cowen & Co.
Ten years of the cost of solar panels is being pushed back. Projects that have not yet signed price agreements and purchasing power supplies could be delayed unless the customer is willing to pay for high electricity, according to Xiaojing Sun, an analyst at Wood Mackenzie Ltd.
In the solar power system, time would not be so bad. Renewable energy has finally become a champion in the White House and climate targets have been announced throughout Europe and Asia.
At the center of the problem is polysilicon, a highly refined form of silicon, one of the most widely used materials on Earth commonly found in ocean sand. As the solar industry tries to meet the expected increase in demand for modules, polysilicon manufacturers could not keep up. Prices for refined metalloids touched $ 25.88 a pound, up from $ 6.19 less than last year, according to PVInsights. Polysilicon prices are expected to remain stable until the end of 2022, according to Roth Capital Partners analysts including Philip Shen.
And the problem is not limited to polysilicon. The solar sector is facing “pervasive costly procurement challenges,” said panel manufacturer Maxeon Solar Technologies Ltd. in April.
Solar panels are made of heated sand and refined into ultra-conductive polysilicon fibers cut into shiny pieces, stranded into cells, and assembled into roof panels and covered with large fields.
Prices for steel, aluminum, and copper have also risen, as commodity prices Solar-microinverter supplier Enphase Energy Inc., said it expects its delivery volumes to be restricted to the availability of a semiconductor component.
Ten years of the cost of solar panels is being pushed back “Down the polysilicon river, it is very painful,” Canadian Solar Vice President Xiong Haibo said at a conference in China, according to the Solar industrial sector. “Currently, it is not in the lower profitable companies and they are all reducing productivity.”
However, the hiatus in the long-term slope is reduced by the continuous improvement of solar panels, says Nitin Apte, chief executive officer of Vena Energy Pte. The company is not planning a delay this year on its solar projects across Japan, Taiwan, Australia and India.
“I see this as a temporary situation, and few projects can see that that eats away at our risks,” Nitin said in a statement he had in his office in Singapore. “We are not delaying construction. We close orders at the best prices we can find. ”
For a long time, the shortage has encouraged the construction of new polysilicon factories, including the announcement this month of what will be China’s largest facility.
“One would expect that any material with a polysilicon-containing growth factor would continue to be included in the system,” Vena’s Nitin said. “The challenge is to put that skill in time for full growth.”
Source: Bloomberg Green