The wholesale downward trend of solar module prices on a cost-per-watt level had to end eventually, and the tide may have just turned, citing an August increase in silicon wafer prices by LONGi and TCL Zhonghuan—two large manufacturers of silicon wafers used in solar panels. This comes as an overdue respite for solar module manufacturers seeking a return to profitability in 2025. So, what does this mean for the future solar energy landscape locally?
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- LONGi and TCL Zhonghuan raise silicon wafer prices, reports PV Magazine
- Improved international solar panel demand
- Likely increase 'cost p/Watt' of record low wholesale solar panel prices
- Reduced subsidy value and increased panel prices will affect system affordability (Cost per/Watt) in 2025
Like all global markets, the solar energy market has endured an interesting period, with continued ripples affecting purchasing certainty at scale: COVID-19, the Russia-Ukraine conflict, US Manufacturing laws, and the overall complex international landscape, which affect supply chains in a start-stop, start-stop, start-again motion.
The recent increase in silicon wafer prices is a reprieve for manufacturers forced to sell excess stock below the cost of manufacture. Demand for silicon wafers is a sign that the previous market saturation has cleared, and pressure for increased production of the fundamental component used to build solar panels has returned internationally among a broader segment of solar panel manufacturers. Interestingly, a turn towards higher solar module prices is good for purchasers.
Image: Whole cell Silicon wafer used in solar panel construction.
Considering the new solar panel warranty is at least 25 years for residential rooftop solar panels, system owners need a manufacturer that is more likely to be around in 25 years. When writing, most solar panels at wholesale in Australia are close to or below the manufacturer’s production cost. All businesses have a limited window to exist without margin. An increase in silicon wafer prices signals that many remaining manufacturers have more likely weathered the loss and resumed taking new orders.
Forecast: Leading manufacturers will return to profitability in 2025/26 as demand firms through more countries adopt a more carbon-neutral future. Smaller module manufacturers will experience an enduring period of uncertainty.
1. The Small Technology Certificate (STC) value used to subsidise solar energy system costs in Australia will be reduced from the 1st of January 2025. Example: A $38 Small Technology Certificate value and 440W solar panel for multiplication of the most common system sizes in the Perth and Bunbury region of Western Australia:
3.9 kW
- 3.9 kW = $1,456 – 2024 installation
- 3.9 kW = $1,248 – 2025 installation
6.6 kW
- 6.6 kW = $2,426 – 2024 installation
- 6.6kW = $2,088 – 2025 installation
10.5 kW
- 10.5 kW = $3,882 – 2024 installation
- 10.5 kW = $3,327 – 2025 installation
13.2 kW
- 13.2 kW = $4,852 – 2024 installation
- 13.2 kW = $ 4,159 – 2025 installation
19.8 kW
- 19.8 kW = $7,279 – 2024 installation
- 19.8 kW = $6,239 – 2025 installation
39.6 kW
- 39.6 kW = $14,577 – 2024 installation
- 39.6 kW = $12,478 – 2025 installation
99.8 kW
- 99.8 kW = $36,717 – 2024 installation
- 99.8 kW = $30,908 – 2025 installation
2. Should silicon wafer prices continue to increase, downstream newly produced module costs will increase. Silicon wafers are a fundamental component of the greater global demand for improved sustainable energy resources in areas with abundant sunlight than alternative sustainable energy sources.
As the August 2024 PV Magazine article Chinese PV Industry Brief: Longi, TCL Zhonghuan Raise Silicon Wafer Prices points out, major silicon wafer manufacturers Longi and TCL Zhonghuan have recently increased their prices. This is due to several factors, including rising polysilicon prices and strong demand for solar panels. Price increases are expected to continue, which could lead to higher solar panel costs depending on alternative local market factors.
Image: Raw material Poly Silicon rock used in solar panel construction.
Like any market saturation, prices fall as the demand to move excess stock becomes more critical. Astute investors identify opportunities where rebound potential exists. With record-low wholesale cost p/Watt module prices and improved global demand for the fundamental component required for manufacturing solar panels, it may well be that a more opportunistic moment for a solar energy investment exists today.
Perth Solar Warehouse is committed to providing our customers with the latest information on the solar industry. If you are looking for local advice on a solar energy system that matches your needs without overcomplication, we can assist.
PV Magazine: Chinese PV Industry Brief: Longi, TCL Zhonghuan raise silicon wafer prices
McKercher Corporation: Silicon Wafer Prices Rebound: Implications for Solar
