Manufacturing capability continues to develop all through the PV provide chain. As producers mobilize to remain aggressive and optimize prices, the results of an imbalance between provide and demand will grow to be much more pronounced. Producers’ methods and market tendencies grow to be clear in the direction of the top of the primary quarter.

The availability chain will see an growing focus of producing capability, with the polysilicon and wafer segments exhibiting the dominance of some giant fish. The market share of polycrystalline silicon and Tier 1 wafer producers is anticipated to succeed in 78% and 90%, respectively. Producers of Tier 1 cells and modules additionally proceed to extend capability in response to large-scale tendencies. The distribution of capability is shifting to giant corporations. PV InfoLink calculates that the estimated market share of Tier 1 cell and module producers will attain 87% and 60% respectively this 12 months.

From a provide viewpoint, the capacities of Tier 1 producers are adequate to satisfy market demand. With price, know-how, and branding benefits, Tier 1 producers will push Tier 2 gamers to sluggish capability ramps and even knock them out of the market.

As photovoltaic technology capability will increase, the market is prone to grow to be unbalanced. Because of rising prices from crash-induced polysilicon shortages final 12 months, vertically built-in corporations have introduced capability growth plans. Consequently, cell capability is getting extreme this 12 months and PV InfoLink calculates that additional expansions will deliver the self-sufficiency charge of the highest 10 vertically built-in producers to over 80% by the top of the 12 months.

Cell producers should remodel to compete with these rivals. Since 2020, producers have fashioned strategic alliances and signed long-term provide contracts. Some producers have additionally began planning roadmaps for next-generation know-how within the face of photo voltaic cell overcapacity. Longi, Jinko, Aiko and Tongwei, for instance, can all reserve new manufacturing strains for later set up for the n-type. Nonetheless, progress in increasing the capabilities of HJT and TOPCon has been sluggish as HJT has to chop prices and TOPCon has to beat technical hurdles. The development of GW-scale initiatives, the materialization of capability growth plans and market consolidation tendencies will likely be crucial this 12 months.

Along with pushing provide chains to combine, the ten largest vertically built-in corporations have introduced long-term glass sourcing plans to make sure a gradual provide. Towards this backdrop, the previous 12 months was marked by growing monopolization and because the market shifts in the direction of large-scale merchandise, PV producers will face a structural shift in provide and demand, as properly. solely at aggressive costs.

Measurement change

The availability chain has skilled a scarcity of merchandise of various sizes since 2020, as a result of speedy dimension transition in China. This occurred extra slowly in abroad markets, leading to a spot between end-user demand and promoted merchandise. Thus, photo voltaic merchandise and nomenclature suffered short-term value turbulence, with the costs of 158.75mm mono PERC G1 cells exceeding that of 166mm M6 cells for the primary time. The adjustments in dimension recommend that such short-term structural deviations can happen on the closing stage of a product’s life cycle: costs will rise within the quick time period and fall as demand adjustments.

Structural deviation may happen within the glass phase attributable to furnace limitations and longer time necessities on capability growth and adjustment. This 12 months, Xinyi Glass, Flat Glass Group, CSG Holding and Almaden will improve their capability, whereas small glass producers will reopen older manufacturing strains or plan to extend capability. In the meantime, the Chinese language authorities has relaxed laws on increasing glass capability. Nonetheless, the provision of huge format glass will stay restricted as it can take time for brand new capacities to be introduced into service. In mild of this, vertically built-in corporations are lively in signing long-term contracts upfront.

Value evolution

Polycrystalline silicon shortages pushed up costs within the mid-level and upstream segments within the first quarter. As polysilicon and module nomenclature costs are anticipated to stay excessive within the second quarter, module producers face growing price pressures. Module costs will stay at a excessive degree all through the primary half of the 12 months, modules utilizing M6 wafers are anticipated to be $ 0.202-0.208 / W, with a value differential of $ 0.01 / W for modules primarily based on 182 mm M10 inserts. Common costs for modules primarily based on 210mm G12 inserts could also be barely larger.

Since new manufacturing strains are anticipated throughout Q2 and Q3, when the off-season will fall, monofacial modules primarily based on M6 wafers may drop to lower than $ 0.20 / W. As well as, producers which provide giant format modules grow to be extra monopolized and the provision of huge format glass won’t be adequate in comparison with standard sizes. Due to this fact, there won’t be a lot value discount within the third quarter. Costs for M10-based modules will drop to $ 0.202-0.21 / W, however costs will not collapse like they did after the June 30 set up rush in China in earlier years. General, excessive module costs, excessive freight charges and the weakening US greenback, together with the continuing pandemic, might impression PV demand.

Vertically built-in corporations are tightening controls over their sourcing and shifting manufacturing in-house, whereas producers are working to type partnerships to safe provides and keep aggressive as they transition to giant sizes. Some producers are additionally planning n-type know-how roadmaps to remain forward of a quickly altering market. Clearly, producers’ methods play a decisive function in market focus.

Concerning the Writer

Amy Fang focuses on the analysis and evaluation of the photo voltaic cell phase of the provision chain. She helps the PV InfoLink workforce in producing market pattern evaluation and works on value forecasting and manufacturing capability knowledge providers. It contributes to analysis efforts on photo voltaic cell know-how and offers well timed evaluation of market tendencies.