The slumping cost of semiconductor chips since the 1950s transformed our world, turning computers from a costly piece of industrial plant to an ubiquitous presence in our smartphones, watches, cars and refrigerators.
Something similar has happened over the past decade to that other critical semiconductor, solar-power cells but now all that seems to be coming to a grinding halt.
Solar modules that cost $1,870 per kilowatt in 2010 were changing hands for $163 per kW last year, turning photovoltaic, or PV, power from an expensive curiosity into a technology that’s remaking the energy system.
Though solar modules that cost $1,870 per kilowatt in 2010 were changing hands for $163 per kW last year, turning photovoltaic, or PV, power from an expensive curiosity into a technology that’s remaking the energy system.prices are still a fraction of what they were 10 years ago, the increase in costs for solar modules this quarter is the biggest in more than a decade
That trend has come juddering to a halt in recent months. The price of solar modules is up nearly 15% so far this quarter. If that continues, it would represent only the seventh quarter out of the past 45 when prices have failed to decline.
Raw materials are to be blamed for this rise. Prices for polysilicon, the shiny, semi-metallic substance from which both solar panels and computer chips are made, have been surging as stepped-up plans for renewable installations crash into the supply chain problems of a global economy awakening from Covid-19.
At $29.41 a kilogram, PV-grade polysilicon is now as expensive as it’s been since 2012, and thus costs nearly three times more.
A tight polysilicon market in 2021 is likely to ease in the coming few years as new supply comes on stream.
The good news is that a vast amount of polysilicon capacity is due to hit the market over the coming years. Supply by Chinese manufacturers will increase by about 76% through 2023, according to BloombergNEF.
Such a build-out will outstrip even the heady pace of solar demand growth, pushing polysilicon prices back to pre-Covid levels by the end of 2022 before heading towards a downward trend again.
Reference- Mercom India, BloombergNEF, The Wire, PV Magazine, Bloomberg Green