CEA suggests that solar wafer prices will fall by 23% by the end of 2023, while Bloomberg NEF sees 500 GW of manufacturing capacity online by the end of next year.
Solar polysilicon reached its highest price since 2011, when the price of polysilicon hovered between $60 to $80/kg for about two years as the industry cooled, after the $460 per kg peak seen in the early in 2008.
According to a spot market analysis by China Nonferrous Metals Industry Association, last week’s price touched $45.47/kg, before settling slightly lower. This is an increase of more than 600% from the low price of less than $7/kg, seen in the second quarter of 2020.
Source: Bernreuter Research
If we consider that it takes about 3 grams of raw polysilicon to make each watt of a solar panel, then a 400 watt residential solar panel uses 1.2 kg of polysilicon. The largest panel – 700 watt utility-scale modules – uses 2.1 kg. At today’s prices, that’s $51 in polysilicon for residential panels, at 12.7¢/watt. A 700 watt utility scale panel has $90 of polysilicon.
Keep in mind that these spot market prices tend to be much higher than the prices paid in long-term contracts. The cost of polysilicon inputs has not risen nearly as high, so companies that make their own polysilicon are actually paying much less for their input costs.
Several parties have suggested that the industry should see large volumes of polysilicon production come online by the end of the year, which will lead to lower prices starting in 2023.
Clean Energy Associates (CEA), in their PV Price Forecast Program Q2 2022states that they expect ‘significant expansion of ingot and wafer suppliers is expected to create a competitive market landscape when these suppliers can again be a source of low prices Polysilicon.’ The group said that by the end of 2022, the world will have approximately 285 GW of polysilicon manufacturing capacity online.
While the executive preview version of the report does not break down future polysilicon pricing, the CEA suggests that the average 2022 wafer price of $0.13/W could fall by 23% by the end of 2023. This means that polysilicon pricing could fall for about $10 per kilo. This will lead to solar modules – priced at $0.27/W FOB China for Q4’22, and $0.26/W FOB China for Q1’23 – falling to $0.23/W by the end of 2023.
Bloomberg NEF recently suggested that by the end of 2023, there will be enough polysilicon manufacturing facilities to supply 500 GW of solar modules.
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