Component prices are declining,and the United States will still have the highest global market price for photovoltaic modules

Component prices are declining, and the United States will still have the highest global market price for photovoltaic modules

In the next five years, the price of photovoltaic modules will decline significantly. However, due to the import policy and the continuous competition with China, the market premium will be increased, and the market price in the United States will still be higher than that in other regions of the world.

The latest "Photovoltaic Price Forecast Report" released by the Colorado based Clean Energy Association (CEA) shows that the decline in polysilicon prices will lead to a sharp decline in component prices in China in 2023, with Southeast Asian components following closely in 2024.

CEA predicts that from the fourth quarter of 2022 to the fourth quarter of 2023, as polycrystalline silicon prices fluctuate downward along the supply chain, the prices of Chinese components will decline by about 15%. CEA stated that polycrystalline silicon accounts for approximately 16% of component prices. PV Tech Premium has been tracking silicon prices in our PV Price Watch series of reports, and announced a 2.6% decline last week.

In 2023, Southeast Asian component prices will decrease by about 5%, and further decrease by about 10% by 2024 and 2025. In 2024, as the profit margin of the entire supply chain decreases, component prices in China will begin to normalize.

Although domestic manufacturing bases in the United States are accelerating, import policies will minimize the benefits for the United States from the global component price decline over the next three years

The interference with US importers will be alleviated before 2023, but the preparation time for component shipments and bookings will be extended to 2025, causing demand and prices in Southeast Asia to continue to rise. Last year, 2GW components were detained by customs at the US border, and more recently, components have been detained. After detaining 2GW, US Customs will deduct another 410MW of photovoltaic modules.

The CEA stated that the 10% decline in 2024/25 was mainly caused by the large production capacity launch in Southeast Asia. In addition, the response to the preliminary results of anti-dumping and countervailing duty (AD/CVD) investigations has been more positive than expected, and suppliers will not raise prices significantly as expected to alleviate potential interference.

For American developers in the Southeast Asian component market, CEA suggests that the first/second quarter of 2025 is the optimal window period in terms of supply and price.

In general, because the supply shortage caused by UFLPA has brought the premium of imported products, suppliers can maintain profits, so despite the general decline in prices, the United States will see the highest component market prices in the world.

Since the passage of the Inflation Reduction Act, the United States has started building its domestic photovoltaic manufacturing base to ensure its own supply chain. Wood Mackenzie predicts that meeting US demand with domestic supply will become a challenge in the coming years. In February of this year, PV Tech analyzed the path to achieve complete control of the photovoltaic manufacturing industry in China.

In terms of technology, TOPCon technology will still be more expensive than PERC in 2023 and 2024, as facilities that are establishing or transitioning to TOPCon capacity will take some time to make progress.

In 2024, as the industry adopts TOPCon components on a large scale, the price gap between TOPCon and PERC will narrow. However, CEA predicts that the gap will continue to exist, and as the adoption rate of TOPCon increases, PERC will supply at a discount rate and gradually exit.