“Price falling” was a main buzzword in the Chinese photovoltaic industry in 2023. Throughout the year, whether for silicon materials, silicon wafers, solar cells, or modules, prices experienced significant declines compared to the beginning of 2023.
In 2023, domestic prices for silicon materials, silicon wafers, solar cells, and modules witnessed respective declines of 66.91% (monocrystalline dense materials), 48.66% (M10 silicon wafers), 38.37% (G12 silicon wafers), 55.00% (P-type 182 solar cells), 53.75% (P-type 210 solar cells), 48.01% (P-type 182 monocrystalline modules), and 46.45% (P-type 210 monocrystalline modules).
While fluctuations in supply chain prices are not uncommon in the history of the photovoltaic industry, the substantial decline in 2023 triggered a new round of intense competition. Combined with the accelerated trend of technology iteration, this led to a “hot and cold” situation across the industry chain over the past year.
As 2024 began, the latest quotes for silicon materials and silicon wafers continued a slight downward trend, with module prices still sliding. In 2024, the domestic photovoltaic market will still need to undergo a process of hitting a price floor and accelerating capacity clearance. This will put the cost capabilities of various enterprises to the test.
Revert to 2023
Data from InfoLink Consulting reveals that in the silicon material segment, the average transaction price of monocrystalline dense material dropped from €2,290.6/ton at the beginning of the year to €757.9/ton at the end of the year—a decline of approximately 66.91%. As an upstream segment of the photovoltaic industry, silicon material prices exhibited a continuous, incessant decline, despite a brief uptick in the first quarter of 2023 due to increased demand following the recovery of work rates post-Chinese New Year.
Specifically, in the first two months of 2023, influenced by purchasing demand following the post-Spring Festival recovery, the average transaction price of monocrystalline dense material rose from €2,288/ton to €2,795.6/ton. From February to early March, the silicon material market remained active, peaking at an average transaction price of €3,086.2/ton.
However, starting in the second quarter of 2023, silicon material prices entered a continuous freefall mode. By the first week of June, the average transaction price of monocrystalline dense material fell below €1,000/ton. Since the second half of 2023, the dark cloud of price decline has continued to hover over the market. Driven by concerns of overcapacity, the start of 2024 saw an unfavorable continuation of this downward trend.
It is noteworthy that with the expansion of N-type product capacity, demand for N-type materials surged. The overall price of N-type silicon material maintained a price premium compared to P-type material. Therefore, in the first week of 2024, the average transaction price of N-type silicon material remained stable compared to the previous period.
In the past year, silicon material experienced the largest price decline among all segments of the photovoltaic supply chain. Following closely was the solar cell segment, with average transaction price drops of €71.50/W for P-type 182 cells, €69.69/W for P-type 210 cells, and €76.79/W for N-type TOPCon cells in 2023.
P-type cells dropped from €0.2/W at the beginning of the year down to €0.1/W by the end of the year. Between March and mid-May 2023, the average transaction price of P-type solar cells temporarily surpassed €0.13/W due to tight supply and rising prices in upstream silicon wafers. However, as silicon wafer prices subsequently dropped, the cell segment could no longer withstand cost pressures, and prices began to loosen.
The year 2023 witnessed an accelerated transition in cell technology from P-type to N-type. Starting in May, N-type TOPCon cells began seeing concentrated market quotations, maintaining a price difference over P-type cells. Influenced by the rapid increase in N-type cell capacity, the price of N-type cells was cut in half in just six months—a decline of nearly 60%—providing greater impetus for the accelerated conversion of cell capacity in 2024.
The overall price decline in the silicon wafer and module segments in 2023 was under 50%. Nevertheless, prices in these two segments reached historical lows, particularly for complete solar modules.
In the silicon wafer segment, price trends for two mainstream size specifications (M10 and G12) in 2023 closely mirrored those in the silicon material segment, reflecting their direct exposure to raw material prices. Interestingly, the price trends between the two wafer specifications diverged: G12 silicon wafers experienced a significantly smaller decline than M10, maintaining a higher premium due to a more balanced supply-and-demand relationship.
Since the third quarter of 2023, price drops in the module segment became one of the hottest topics in industry discussions. When opening bid prices for centrally procured components by state-owned enterprises fell below €0.13/W in November 2023, the market reaction was chilling. By December, the average transaction price of domestic P-type modules officially dropped below €0.13/W. Furthermore, the price decline for N-type TOPCon modules exceeded 48%, approaching an average transaction price of €0.13/W as well.
Industry insiders pointed out that module prices below €0.13/W are the direct result of intensified market competition. For a sector that prioritizes cost reduction and efficiency improvements, this signifies that future competition will become increasingly fierce.
At the beginning of 2023, module prices were still at €0.23/W. In less than ten months, prices plummeted by more than half. According to data from InfoLink Consulting, the descent in module prices has not yet ceased. In the first week of 2024, execution orders for domestic P-type 182 monocrystalline modules ranged from €0.11 to €0.13 per watt, while prices for 210 monocrystalline modules in ground projects slipped to €0.11–€0.13 per watt.
Furthermore, on January 9, 2024, opening bids for China Energy Construction’s 42GW module centralized procurement project revealed that among quotes from 55 companies, the lowest comprehensive bid for P-type modules was €0.105/W, while the lowest bid for N-type modules was €0.113/W.
Where is the Bottom?
Prices in the solar power industry depend heavily on how much capacity enters the market at each stage. In 2022 and 2023, China saw rapid growth in the manufacturing capacity of key elements in the solar power supply chain. In 2022, Chinese production of polysilicon, silicon wafers, cells, and modules increased by over 55% year-over-year. The first ten months of 2023 also marked a historic high in production across these elements, recording significant growth rates.
According to statistics, the production capacity of various elements across the solar power industry in China surpassed 800 GW in 2023, growing by over 60% compared to 2022. The production capacity of solar cells and modules expanded the most, driven by integrated and cross-border capacity upgrades.
This surge in capacity has two main effects:
- The surge in volume and corresponding drop in prices in 2023 squeezed profit margins across all manufacturing stages.
- Concerns about continuing price declines carried into 2024, prompting an urgent need to clear excess production capacity.
Looking back at 2023, profitability across different market segments varied. The silicon material segment faced severe challenges, the silicon wafer segment had a tough time, while cell and inverter manufacturers experienced mixed outcomes. Companies leading the transition to advanced N-type technology and integrated energy storage solutions enjoyed the primary benefits of technological advancements.
However, with substantial new capacity coming online in 2024, the market will continue to push manufacturers toward higher efficiency and tighter cost controls.ere is a growing industry interest in when the solar power industry will hit its bottom in 2024. As the industry reshuffling cycle repeats in 2024, companies are adopting different strategies for capacity expansion.
