The solar panel supply chain is facing significant difficulties world-wide and as a result the price of modules in Australia is rising and availability of modules is decreasing. Developers and project owners are dealing with longer lead times and a pricing landscape that is changing rapidly, sometimes week to week.
In China, where the majority of the global supply of solar panels are made, manufacturers have had to deal with an ‘energy crunch’ brought about by the reduction in coal use for energy generation to meet emission reduction targets and due to ongoing trade negotiations with coal suppling countries like Australia.
Higher energy costs directly impact the panel supply chain in key component areas where processes are energy intensive. Poly silicon, solar glass and adhesive films have been increasing in cost since Q1 2021 from 9% to 35%.
Logistics costs for all industries world-wide are continuing to go up due to the effect COVID-19 is having on labour availability, shipping demand and fuel costs.
In Australia LONGi are partnering with leading distributors to ensure that high quality solar modules reach installer customers when needed for projects. A prime example is the long-term partnership between LONGi Australia and market leader One Stop Warehouse (OSW) who currently have a 25% share of the market.
Recently LONGi have signed an agreement with OSW that will guarantee significant supply of high efficiency solar modules to OSW customers in Australia in 2022.
LONGi is a major manufacturer that is vertically integrated, this means that they create all of the key components that go into their modules rather than purchasing them from third party suppliers, as such, LONGi Solar Australia is able to make sure that they have enough stock for their Australian customers.
“It is a big benefit to be part of a vertically integrated group and allows us to secure supply of solar panels for our customers in Australia.” according to Stephen Zhang, Managing Director, LONGi Solar Australia. “It is a difficult period for everyone during this global energy crisis but LONGi Australia will endeavour to maintain a stable supply of solar panels on the market.”
One of the biggest challenges for solar customers, whether an installer, developer or asset owner, is understanding the current and future pricing and availability trends for solar panels. How can an installer quote, distributor order or developer plan for projects that will happen in 3 months or even a years’ time from the current date?
LONGi as a vertically integrated manufacturer is uniquely able to anticipate the movement in price across the upstream supply chain and therefore help customers prepare for the future and avoid shocks. “We are committed to passing on prompt and insightful information about cost variations and changes to product availability in Australia.” Said Stephen, “When something happens in the Chinese manufacturing base we will pass this information on to our local partners in Australia to allow them to be fully prepared.”
As the world continues to open up and energy prices stabilise the solar supply chain will likewise become more predictable. In the meantime LONGi Solar Australia will use its technical strengths and manufacturing depth to help local customers achieve their business and sustainable energy goals.