Solar module prices unexpectedly spike
An unexpected surge in demand for solar modules is inflating prices.
On Thursday, InfoLink reported that the selling price for mainstream TOPCon solar modules has climbed to RMB 0.8/W in recent weeks – a 30% rise from the RMB 0.6/W low in December 2024.
ICYDK: Rampant overcapacity has battered the solar industry since 2023, with prices falling below the production costs of even the most cost-competitive manufacturers.
The recent price increase is driven by power market reforms that have inadvertently caused a spike in demand for solar modules.
- To alleviate pressure on the electricity grid, in January, the energy regulator (NEA) announced that large-capacity distributed solar projects built after May 1 won't be able to sell power back to the grid.
- In February, the National Energy Administration (NEA) revealed that projects built after June 1 won't receive guaranteed fixed tariffs – exposing them to volatile market competition.
These reforms will lower returns for projects built after the cutoff dates.
- This is driving an installation boom, with developers rushing to accelerate installations to meet the tight deadline, leading to a significant surge in module demand.
Get smart: The recent price recovery isn’t based on market fundamentals – it is driven by an unsustainable demand surge from frontloaded investments.
- This boom has caught manufacturers – who have collectively pursued production cuts in recent months – off guard.
- The momentum is likely to fade or reverse sharply in H2 once the frenzy subsides.