Solar pv panels prices drop below 0.8 yuan per watt in the photovoltaic industry

Accelerating reshuffling in the photovoltaic industry.

Recently, Beijing Energy Group Co., Ltd. opened bids for the 2024-2025 photovoltaic component framework agreement procurement. It's reported that the type of components purchased this time is N-type monocrystalline silicon double-sided photovoltaic, with a procurement scale of 10GW. From the bidding situation, a total of 25 companies participated, and prices hit a new low once again, with the lowest bid per watt reaching 0.76 yuan.

"It is expected that the price of components per watt will fall below 0.8 yuan based on the recent trends of silicon wafers and cells." Wang Tieshan, Director of Industrial Development and Investment Research Center at Xi'an Engineering University, stated in an interview with Securities Daily. For the photovoltaic industry, competition will further intensify, and some enterprises with insufficient competitiveness and outdated capacity will accelerate their exit.

This procurement event underscores the relentless drive toward cost efficiency in the solar industry. The bid's focus on N-type monocrystalline silicon double-sided photovoltaic panels reflects a shift towards advanced technologies that enhance energy conversion rates and overall performance. With 25 companies participating, the competitive landscape is robust, driving prices to a new low of 0.76 yuan per watt.

Wang Tieshan's forecast of prices falling below 0.8 yuan per watt aligns with ongoing trends in silicon wafer and cell production. As prices continue to decline, industry competition will intensify, leading to further market consolidation. Enterprises lacking competitiveness or relying on outdated capacity will face heightened pressure to exit the market. This dynamic underscores the importance of innovation and efficiency in driving the photovoltaic industry forward.

The procurement process reflects the industry's pursuit of higher efficiency and cost-effectiveness. As prices reach new lows and technology advances, the photovoltaic industry is poised for continued growth, albeit with increased competition and consolidation.

Solar pv panels prices continue to fall

In this bidding scenario, the dynamics of the photovoltaic component market are evident. The average bid price for the 25 companies stands at 0.805 yuan per watt, with 9 firms offering bids below the 0.8 yuan per watt threshold, the lowest being 0.76 yuan per watt. Interestingly, bids from the top 7 component companies exceed the average price, showcasing a varied pricing strategy across competitors.

The declining trend in component prices has been persistent since the fourth quarter of the previous year, with prices dipping below the 1 yuan per watt mark. This year, the downward trajectory has continued, with prices plummeting from 0.98 yuan per watt in mid to late January to below 0.8 yuan per watt.

Qi Haishen, Executive Vice President of Jincheng Stock, highlighted that while low component prices may become a norm in the future, the current scenario indicates a bottoming stage with uncertainties. This situation poses a significant challenge for photovoltaic manufacturing enterprises, testing their capability to operate efficiently under low-cost conditions.

The stability of subsequent component prices hinges on the stabilization of upstream raw material prices, as emphasized by an insider from a photovoltaic company. The downward trend in silicon material prices since the beginning of the year underscores this dependence.

The efforts of the Silicon Industry Branch to maintain market stability through measures such as accelerating inspection processes and controlling capacity release reflect the industry's proactive approach to addressing price fluctuations. Despite these efforts, data from the branch indicates continued declines in silicon wafer prices, with some major enterprises reducing operating rates. The prediction that silicon wafer prices have neared the bottom underscores the complexity of market dynamics and the importance of strategic decision-making for stakeholders in the solar industry.

Regarding the development trend of the photovoltaic industry next, Liu Hanyuan, Chairman of Tongwei Group, said at the 2023 Annual Shareholders' Meeting of Tongwei Co., Ltd.: "The photovoltaic industry is optimistic and expects to see some improvement in the fourth quarter of this year."

Industry accelerates reshuffling

The declining prices in the photovoltaic industry chain since 2024 have led to various challenges for companies operating in this sector. For instance, ST Lingda faced cash flow issues with its PERC-type cell production line, resulting in the shutdown of its subsidiary Jinzhai Jiayue New Energy Technology Co., Ltd.'s main production facility. Consequently, normal production is not expected to resume within three months. Moreover, the board of directors decided to terminate the investment in the construction of the Tongling annual output of 20GW high-efficiency photovoltaic cell production base project. This decision reflects the financial strain and uncertainties faced by companies in the solar panel industry.

Similarly, Aino Jushi halted production of its polycrystalline silicon cells due to insufficient orders, indicating the challenges in securing demand in the current market environment. Additionally, Sunflower canceled its TOPCon cell product project earlier this year due to market changes and various factors, further illustrating the industry's volatile nature.

Furthermore, TCL China Star Optoelectronics and Foster experienced project delays or investment contractions. TCL China Star Optoelectronics, for instance, adjusted its plan to issue convertible corporate bonds, reducing the total issuance and corresponding investment projects. This includes scaling down the capacity of the N-type TOPCon high-efficiency solar cell industry 4.0 smart factory project from 25GW to 12.5GW.

These developments underscore the complexities and challenges faced by companies in the photovoltaic industry, particularly in the context of changing market dynamics and pricing pressures. Despite the setbacks, companies continue to navigate these challenges, adapting their strategies to remain competitive in the solar panel, PV module, and custom solar panels markets while balancing cost considerations with product quality and innovation.

According to Securities Daily, some mergers and acquisitions in the photovoltaic industry have already begun. In March of this year, Haiyuan Fucai announced that it would transfer its 15GW N-type high-efficiency photovoltaic cell and 3GW high-efficiency photovoltaic component project in Chuzhou to Zhejiang Aixu Solar Technology Co., Ltd. for 38 million yuan.

Regarding industry consolidation, an insider from a photovoltaic enterprise said: "Some advanced capacity in new layouts, due to some reasons, may not be able to continue investment or operation, perhaps still have acquisition value, but some backward capacity will probably face elimination."

In the view of Qi Haishen, the photovoltaic industry has a fast pace of technological iteration and upgrading, and the ability and potential for renewal and upgrading of photovoltaic equipment also need to be evaluated.

"The long-term trend of the photovoltaic industry remains positive, and the continuous decline in prices of the industry chain is mainly due to the mismatch between supply and demand caused by capacity expansion. Currently, as the prices of major links in the industry chain continue to decline, industry reshuffling is accelerating. With the accelerated elimination of backward capacity, the supply and demand pattern is expected to improve, and the industry will return to a track of healthy development." Wang Tieshan said.