PV giant Longi Solar has warned Australian solar developers to brace for module supply constraints and short term price volatility over the coming quarter, as three major polysilicon makers negotiate production hurdles at the same time.
In a statement on Thursday, China-based Longi said Daqo New Energy, GCL-Poly and most recently Tongwei had been affected by accidents, flooding and maintenance issues, resulting in a shortage of supply and an increase in average silicon wafer costs of an estimated 10%.
To account for these higher input costs, Longi said it had itself recently raised prices on Mono wafers by 7%, and warned that prices all along the value chain were beginning begun to climb, signalling higher project costs going into 2021.
Longi senior vice president Dennis She said that considering most large-scale PV projects ordered modules six months before delivery, developers looking to secure supplies at the end of 2020 and early 2021 were being forced to reassess their project economics to account for current rises.
And he warned that a lack of pricing certainty was forcing some large-scale solar projects to be suspended.
“In Australia, where the large scale segment of the market is dealing with financing, curtailment and logistical headwinds this news couldn’t come at a worse time,” She said in a statement.
But Stephan Zhang, Longi Australia’s managing director assured that Longi aimed to “moderately adjust prices” within a range that was acceptable to customers.
“Longi hopes to maintain a stable market and a smooth transition when the market fluctuates sharply due to short-term changes in demand and supply,” he said.
“It is estimated that by the end of 2020, our capacity for monocrystalline modules will reach 25GW or beyond. In addition, we produce silicon wafers in-house, and cell manufacturers are our strategic partners, so our timeliness of supply and price advantages will be stronger.”
Longi also said it would give priority to strategic customers “when and if” supply was tight, and was actively working with key partners to agree price adjustment mechanisms and remove uncertainty.
“Longi is in the Australian market for the long term,” said Zhang. “(It) does not want to see a sharp rise or fall in module prices, as neither is a positive for the industry long term.”
