We recently wrote about solar PV prices and how a Biden win could be bullish for solar panel prices next year. Why? The extra demand that would come from a Green New Deal-type stimulus. While it looks like Joe Biden will be the next US President, the Republicans controlling the Senate – at least for now – means any kind of big Green New Deal may be off the table.
Solar PV prices still look set to rise. Very strong Chinese PV demand is already causing solar-grade glass shortages which will take some time to resolve.
Chinese PV Demand Finishing 2020 Very Strong
After a wild start to the year, with the COVID-19 pandemic impacting the entire solar supply chain, demand for PV modules has exploded. For example, China alone is expected to install as much as 29 GW in the second half of 2020. This is due partly because of delays earlier in the year and now looming grid connection deadlines.
Indeed, the 2nd biggest solar park in the world, a 2.2-GW capacity solar park in the northwest province of Qinghai is but one example. Completed in October 2020, it ranks as the second-largest in the world.
Solar Grade Glass In China Is Hard To Find
All this domestic demand for solar PV has outpaced the PV glass suppliers’ capacity.
The average selling price (ASP) of solar-grade 3.2 mm glass in China jumped from 26 yuan/square meter in June to 41 yuan/square meter in October. Case in point, prices as high as 48 yuan/square meter being reported.
So serious are the solar grade glass shortages that major module manufacturers in China have put out a joint statement calling on the Chinese government to help. The suppliers describe the current as, “out of control”. Canadian Solar, Risen Energy, JA Solar, JinkoSolar, LONGi, and Trina Solar, and others have issued a list of potential remedies for the Communist Party of China to consider as it puts together its 14th Five-Year Plan, due to be unveiled early next year.
Consequently, in their letter the six major module manufacturers write:
The total supply of modules is insufficient, and PV module companies have already experienced large-scale delivery delays
Joint statement issued to the Communist Party of China by Canadian Solar, Risen Energy, JA Solar, JinkoSolar, LONGi, Trina Solar, as well as others
As a result, the stock prices of PV glass manufacturers have surged in the last few months. Prices for glass that coats photovoltaic panels have risen 71% since July and manufacturers are struggling to produce it fast enough to keep more than a week’s worth of sales in inventory, according to Daiwa Capital Markets.
Share Price of Flat Glass Group in Hong Kong
The solar panel producers have asked the government in China, home to most solar manufacturing, to address the situation by approving new factories. Otherwise, price hikes risk making solar power too expensive and halting the industry’s momentum.
In 2018, with the energy intensive and polluting glass industry facing over-capacity issues, China’s government forbade companies from adding new production capacity. Longi and five other major solar companies on Tuesday met with government officials and appealed for them to remove the restrictions, at least for solar glass.
Bifacial Panels Adding To Demand
Glass demand has also been rising within the solar industry because of the increasing prominence of bifacial panels which coat both the top and bottom with glass. The bifacial design allows for a slight uptick in power generation from sunlight reflected off the ground. Such panels are expected to make up half the market in 2022, up from about 14% last year, according to analysts at Sunwah Kingsway.
Solar panel prices have fallen over the course of 2020, the tightness in Chinese glass probably points to higher prices from here.
In short, building new glass factories takes time. It is expected the disruption to the supply chain may take into 2022 to resolve and could lead to higher solar panel prices. China’s aggressive renewable energy plans mean demand pressures will remain strong. Specifically, Liu Yiyang, the deputy general secretary of the China Photovoltaic Industry Association, said that from 2021 to 2025, solar investments will grow in China by more than 65 GW per year. According to Shi Jingli of the China Renewable Energy Center, photovoltaics will reach grid parity in the country during this period.
Adding Solar Now Can Save You Money, Waiting May Cost You
Avolta Energy can help your company take advantage of the best panel prices in the event that glass shortages impact supplies. Reach out to discuss how you can not only begin saving sooner but beat any shortages which may arise due to supply constraints and market demand.
Bottom line: Mitigate the impact of supply disruption by investing in solar now.
Experience Counts More Than Ever to Assure You the Best Solar PV Prices For Your Project
Members of Avolta Energy’s executive team have deep experience understanding supply chain economics- especially risk and disruption- having held top positions as energy analysts at Morgan Stanley, Citi, Glencore and PFC Energy. Avolta Energy’s President, Seth Kleinman, left his position as Managing Director and Global Head of Energy Strategy at Citi advising corporate and institutional clients across all geographies and time zones to bring his experience to clean energy. Rest assured, Avolta Energy has the experience, knowledge and positioning to help your company effectively navigate this complex time, especially when it comes to price and value.