Rising energy costs have made global headlines over the past two months, but prices across the solar supply chain are marching at their own pace, writes Hanwei Wu of OPIS. Oversupply in Asia continues to disrupt markets, with sharp price drops or tepid price increases.
From the magazine
The Global Polysilicon Marker (GPM) has changed little since the last outbreak of war in the Middle East. The OPIS benchmark for polysilicon produced outside China was set at $19,138/kg, or $0.040/W, on April 14, up just 1% from February 24, the week the war in Iran began. During the same period, China Mono Premium – OPIS’s rating for mono-grade polysilicon used in the production of n-type ingots – fell 33% to CNY 34.071 ($4.99)/kg, or CNY 0.072/W; FOB China TOPCon M10 cell fell 11% to $0.05/W; The FOB China TOPCon module rose almost 2% to $0.118/W.
Such price movements pale in comparison to the wild swings in oil markets, especially in Asia. Prices of jet fuel and diesel, the transportation fuels most affected by the war with Iran, more than doubled over the same period from $92.72/barrel (bl) to $210.73/bl and $92.68/bl to $185.75/bl, respectively, on a free-on-board Singapore basis, according to OPIS data.
Traffic through the Strait of Hormuz, a major oil and gas trading artery, has been restricted since the start of the war. But its effects hardly apply to the solar industry, where China remains the dominant manufacturing center, far enough away, if not completely, from the chaos of the Middle East. Instead, the bearish factors that have weighed on the solar market since the beginning of the year continue to play a role.
Oversupply of polysilicon
Inventory build-up in China’s polysilicon segment continued, with no clear signs of an upcoming turnaround. Order volumes per transaction from major bill and wafer producers remained extremely limited, one producer said, reflecting downstream efforts to minimize inventory losses.
In response to market conditions, manufacturers have taken measures such as initiating maintenance activities and reducing business rates. Several manufacturers in the northwest regions have already implemented production cuts to varying degrees. China’s polysilicon production in April is expected to decline by about 8% from March, according to the Silicon Branch of the China Nonferrous Metals Industry Association.
Such a strategy may well reach its limits. Some manufacturers would operate just a single production line, and at a capacity utilization of only 50% to 70%. Further significant reductions in operating rates would become increasingly difficult under such circumstances.
Major polysilicon manufacturers also have their backs against the wall when it comes to production costs, needing at least CNY31/kg to CNY32/kg just to cover raw material and electricity costs, according to industry sources.
Module increase
In the meantime, module prices have increased modestly due to China’s elimination of the 9% export tax rebates on PV products, which came into effect on April 1. On paper, Chinese manufacturers could make up for lost discounts by charging more for exports. But one manufacturer told OPIS it may have to absorb some of the rebate loss given weak foreign demand in the second quarter of 2026. While the Chinese module market is grappling with the fallout from the rebate removal, the U.S. market is facing a different dynamic as buyers await clearer guidance on multiple trade and policy fronts that would impact solar panel availability in the country.
A Section 337 petition before the US International Trade Commission is in its early stages – initiated in response to a complaint by thin-film manufacturer First Solar to block imports of tunnel oxide passivated contact (TOPCon) solar that allegedly infringes on its patent rights. Some guidelines from the Foreign Enty of Concern (FEOC) regarding solar panels also remain outstanding.
The price of US TOPCon modules reached $0.292/W on April 14, delivered with duties paid, marking a 1% gain from the end of February but nevertheless reaching the highest level since the first week of January.
Given differing market and price dynamics, it is not surprising that while countries dependent on Middle Eastern exports have sought to secure substitute fossil fuels to ensure energy continuity, the Iran crisis has also accelerated policy support for renewable energy deployment around the world.
China, South Korea, Malaysia, Singapore and Thailand are just some of the countries in Asia that have announced solar energy initiatives since the start of the conflict. But with grid and financing problems still widespread in Asia’s renewable energy sector, rapid deployment of solar energy remains a challenge.
Hanwei Wu
About the author
OPIS Editor-in-Chief Hanwei Wu leads the Asia-Pacific team in producing price assessments, proprietary data and news analysis for the solar, carbon, oil and petrochemical markets. In recent years he has launched data products for the oil and renewable energy markets, including solar.
The views and opinions expressed in this article are those of the author and do not necessarily reflect those of the author pv magazine.
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