Demand begins to exceed supply for multicrystalline silicon PV

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For the last four years, the global solar PV market has been in a state of persistent oversupply along the value chain, which pushed down prices mercilessly and drove many manufacturers out of business.

However, on Thursday EnergyTrend published an analysis which adds to a growing consensus that this oversupply is ending. The company reports that prices are rising for all multicrystalline silicon solar products from wafers to cells to modules and that the output of tier one PV module makers has been purchased through the end of 2015.

EnergyTrend cites strong demand from the world’s three largest markets: The U.S., China and Japan. This warning comes only days after GTM Research issued a report describing a module capacity shortfall which is already beginning. GTM expects the global module excess capacity ratio to fall below 30% in 2015, the first time it has been this low in many years, and for this to lead to shortages as early as 2016.

GTM also says that it is starting to see price impacts. "We’re definitely seeing impacts on a regional basis, meaning markets that are high-demand markets, especially in Q4," GTM Research Solar Analyst Jade Jones told pv magazine.

"In the U.S. we are going to see more price stability instead of decline," explains Jones. "For China, we are likely to see prices increase quarter-over-quarter in Q4."

Equipment sales began responding to these changing circumstances as early as the second quarter of 2015, with SEMI reporting a PV equipment book-to-bill ratio of 1.58, its highest level in four years. GTM Research says that this is just the beginning.

"In general, what we are going to need to see in the next few years is capacity investments being more aggressive along the value chain," predicts Jones.

EnergyTrend says that for multicrystalline products, wafers are seeing the biggest price increases. This follows on a warning by wafer maker Green Energy Technologies three weeks ago that there may not be enough multicrystalline silicon wafer capacity to meet demand in 2016.

Notably, EnergyTrend reports very different circumstances for monocrystalline silicon products. The company estimates monocrystalline wafer prices have fallen more than 10% since the beginning of the year, and says that monocrystalline silicon wafer capacity of 14 GW is well above demand projected under 10 GW.

EnergyTrend expects demand for monocrystalline products to increase in 2016, stating that greater use in utility-scale solar projects and increased maturity of passivated emitter rear contact (PERC) technology for mono cells will both be factors.

The company also says that prices have not fallen as much for n-type mono wafers as compared to p-type.