Solar Module Prices Set to Surge Back Above $0.12/W

Yana Hryshko, the head of Solar Supply Chain Research at Wood Mackenzie, anticipates a substantial hike in solar module prices from their current levels within the next six months.

"The prices are bound to increase because the Chinese solar manufacturing industry will spare no effort to make this a reality," she stated. "We might witness the elimination of up to 300 GW of wafer, cell, and module capacity from the market in the near future, mainly from non - Tier 1 manufacturers. Unlike Tier 1 producers, there will be no attempts to rescue them." Pure cell and wafer manufacturers lacking downstream module manufacturing capabilities, as well as module manufacturers relying on outdated technologies such as PERC and low - efficiency TOPCon, are most likely to be severely affected.

Hryshko is of the opinion that the impending wave of insolvency will predominantly impact Tier 2 and Tier 3 manufacturers. This, in turn, could rebalance the market and assist in narrowing the gap between supply and demand.

"Perhaps many of the affected manufacturers won't go bankrupt but will simply repurpose their facilities for other sectors," she said, while pointing out that polysilicon prices are already on the rise, with wafer and cell prices expected to follow suit. "On the other hand, Tier 1 producers haven't cut their capacity but have restricted their production outputs since December when they adhered to the self - discipline agreement imposed by the Chinese government. This agreement targets around 650 GW of production this year, which should be sufficient to meet the global PV demand ranging from 600 GW to 700 GW."

Data from Wood Mackenzie shows that the global current operational module manufacturing capacity amounts to 1.491 TW, with 1.188 TW located in China. Hryshko elucidated that this operational limit in China will lead to an artificial shortage of modules.

"What the Chinese Government is doing in this respect is having an impact," she explained, adding that the newly - released PV industry manufacturing guidelines will also contribute to streamlining the production landscape in China. "If you analyze carefully, these guidelines are designed to support the largest manufacturers. If your efficiency is insufficient and you have outdated technology, you won't be able to build new capacity."

Hryshko further noted that most of the recently announced manufacturing capacities in China are for heterojunction (HJT) or back - contact technologies. "There have been no announcements of new TOPCon facilities so far this year, and PERC is expected to be phased out by the end of 2025, or perhaps even earlier," she said. "The technology transition is occurring much more rapidly than anyone anticipated."

Hryshko forecasts that the prices of high - quality Tier 1 solar modules will soon surpass $0.12/W. "This implies that module prices will at least match production costs for the first time in months," she emphasized. "And this should occur within six months. However, for a while, we will still encounter a large number of cheap, low - quality modules in the market, but eventually, this will come to an end. On the other hand, we must recognize that cell suppliers, wafer suppliers, and polysilicon suppliers have all incurred losses, especially those who are also solar cell and wafer sellers. Now, they aim to recoup their losses, and buyers don't really have much of a choice."

The analyst also expounded that the PV industry might return to pre - Covid levels, with module prices ranging from $0.13/W to $0.14/W, or potentially even higher. "I believe that by the end of 2025, module prices will range from $0.12/W to $0.15/W, depending on the technology," she concluded.