Polysilicon price relief in 2023 as industry scales to 500 GW

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From pv magazine USA

The China Nonferrous Metals Industry Association said last week that polysilicon prices touched US$45.47/kg (AU$66.25), before settling a bit lower. This is an increase of more than 600% from the low pricing of under US$7/kg (AU10.2/kg) seen in the second quarter of 2020.

It takes about 3 grams of raw polysilicon to create each watt of a solar panel, so a 400 W residential solar panel uses 1.2 kg of polysilicon. The largest panels – 700 W utility-scale modules – use 2.1 kg. The 700 W utility-scale panel contains US$90 of polysilicon.

Spot market prices are likely much higher than the prices being paid in long-term contracts. The cost of polysilicon inputs hasn’t risen nearly to the same heights, so companies that produce their own polysilicon are actually paying much less for their input costs. Multiple parties have suggested that the industry should see significant volumes of polysilicon manufacturing come online as the year ends, which would lead to decreases in pricing starting in 2023.

Clean Energy Associates (CEA), in its PV Price Forecasting Program Q2 2022 report, said “significant expansions among ingot and wafer suppliers are expected to create a competitive market scene when these suppliers can once again source lower-priced polysilicon.” It 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 share future polysilicon pricing, CEA does suggest that the average 2022 wafer pricing of US$0.13/W could fall by as much as 23% by the end of 2023. This implies that polysilicon pricing could fall by roughly US$10 per kg. BloombergNEF 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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