China PV Industry Brief: Installations slow, deals continue despite rising prices

This week saw prices in the polysilicon segment, and further downstream, rise again, with no end in sign. National Energy Agency statistics show a slowdown in installations for the second consecutive month in September. Manufacturers, however, continue to purchase components and materials in the expectation that prices will rise even further.

October 22, 2021

China’s energy agency, the National Energy Administration (NEA), released new information on its official site this Thursday about PV installations in the world’s largest market.

China installed 3.51 GW of new PV in September, which brings the cumulative figure for the first nine months to 25.56 GW, with a YoY increase of 44.33% over the same period of 2020. However, due to growing polysilicon costs, and following rising PV module prices, the 3.51 GW installed in September represented the second consecutive month of decline. China hit an installation peak in July which was 4.93 GW, but only 4.11 GW in August.

On the same day, NEA also released statistics of residential PV installation which connected to grid and have been included in the government incentive list. New installation in September in this space amounted to 2.14 GW and make the cumulative figure in 2021 to 11.68 GW. Shanghai province once again topped regional installation rankings, with 699 MW installed in the month. Following are Hebei and Henan provinces, with new installations of 579 MW and 323 MW, respectively.

One of the largest state-owned energy companies in China, the China Energy Engineering Corporation (CEEC) announced on Thursday that the company has signed a strategic cooperation agreement with the local government of Pu’er City, Yunnan Province for comprehensive electric power investments and projects over the coming five years.

According to the statement, CEEC will invest and construct a wind + solar + storage integration project. The planned installation of wind power will be 1 GW, new installation of solar PV will be 4 GW, and supporting storage will be 500 MW / 1,000 MWh. The total investment is estimated to be CNY 23 billion, around US$ 3.57 billion. Once put into operation, the integration project will produce clean electricity power of 740 GWh annually, and with saving of standard coal of 2.3 million metric tons, and reduction in CO2 emissions of 6.48 million MT per year.

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Prices across the solar PV supply chain continue to rise. The selling price of polysilicon reached  CNY 270 (US$42.25)/kg with actual deals. Total output of polysilicon recorded a 3-6% cut off due to energy shortage in production and this contributed to the existing tension in the supply chain. While prices continue shooting up, actual deal volume is also growing, because market believes the price will continue to rise, at least up to Q1 2022, and power price increases will compensate for the extra cost.

Wafer prices remained unchanged this week after rising again last week. Because of the cut down of operation rate in downstream cell production, wafer price is estimated to remain unchanged. Cell prices experienced a slightly rise of CNY 0.01-0.02. The latest quote for 166mm is about CNY 1.14 (US$0.17)/W, and CNY 1.16 (US$0.18)/W for 182mm cell. 210mm cells currently fetch a slightly lower price of CNY 1.12/W

Module prices also kept growing this week. Products of tier 1 brands quoted to CNY 2.10/W on average, with an increase of CNY 0.05 over last week. It was said some domestic projects have been suspended due to high module prices.

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