A 200GW SOLAR IN 2022
Structural imbalances in the supply chain and the energy intensity and consumption controls that China imposed in late September have caused prices for most PV module materials and components to continue to rise. Shipping fees and PV plant construction costs also remain high. PV plants in many regions will therefore be postponed until next year, but it remains unclear when module prices will start to fall. Despite these challenges, the global race to cut carbon emissions continues, and InfoLink’s Corrine Lin forecasts a bright future for PV deployments in 2022.
China’s PV demand is expected to reach as high as 70 GW next year. InfoLink projects that global module demand will range between 196 GW and 212 GW, up more than 20% on 164 GW this year. In the meantime, the rising deployment of solar+storage will accelerate steady solar growth. On the storage side, InfoLink predicts that the total number of homes equipped with solar will pass 11 million, while storage will hit 1.5 million, across four of the leading markets Germany, Japan, Australia and the United States by the end of the year.
The international trade situation and China’s power rationing pose major threats to 2022 deployments. If China relaxes power rationing next year, the pace of PV module price decreases will be subject to polysilicon prices. Polysilicon manufacturers will work toward bringing new capacity online as scheduled, amid high gross margins. Against this backdrop, annual polysilicon production is expected to reach 700,000 MT, which is enough to supply approximately 255 GW of end-user demand.
However, vertically integrated companies continue to ramp up their in-house wafer capacity, while new wafer players such as Gaojing and Shuangliang are also expanding. Large volumes of new wafer capacity will push up demand for polysilicon, and the newly installed furnaces require three to six months to ramp up fully. Therefore, the supply of polysilicon is expected to remain tight in the first half of 2022, with prices decreasing too slowly to ease high PV module cost pressures. Polysilicon prices are expected to hover around CNY 190/kg ($26.35/kg) by mid-2022. If the United States continues its sanctions against Xinjiang, polysilicon prices in regions outside of China may be slightly higher.
Polysilicon prices are projected to decline quarter on quarter, as polysilicon supply grows. If module prices remain high, PV plants that have halted installation will try to postpone as long as possible to secure better module prices. In light of this, module prices and overall demand will impact each other next year. If module prices decrease markedly, overall module demand will increase.
While capacity expansion continues across the supply chain, uncertainties caused by power rationing and international tensions will lead to low module orders for the first quarter of 2022. Consequently, module prices, which stayed at $0.28/W to $0.29/W, finally showed signs of decline in November. Meanwhile, prices for other components such as glass also began to slip. It’s expected that a slow downward trend in module prices will begin in the first half of 2022.
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