According to BNEF, the reduced policy support for deployment in China will cause a 34% price drop for multicrystalline solar module prices in the country in 2018.
In the past, the global average selling price (ASP) for multicrystalline solar module prices in China has seen ups and downs. Another drop is expected now, following previous falls in 2011 and 2016. According to Bloomberg New Energy Finance (BNEF), this year‘s decrease will be by 34%, thus exceeding the forecast of 20 to 27%.
Consequences for global market
Members of BNEF‘s Chinese team have looked at possible consequences this price drop might have for the global market. With China being the global market leader, they expect the same to happen worldwide. Their forecast is that the benchmark monocrystalline module price of US$0.37/watt for the fourth quarter of 2017 will go down to $0.24/watt throughout the year. With this perspective, BNEF believes that developers are likely to halt projects now, waiting for reduced prices.
Although BNEF previously anticipated the global PV demand in 2018 to be 107 GW, this figure has now been reduced to 98 GW based upon these developments. In the long run, however, the decline could stimulate the demand growth in 2019 and 2020.
Impact on supply
Based upon the aforementioned predicitions, BNEF considers it likely that the overall demand for modules will go back. Polysilicone will see the strongest drop, meaning that prices might be reduced to $11-12 per kilogram, yet all silicone will be affected.
Moreover, sales figures for monocrystalline modules will go back drastically as well, resulting in large amounts of inventory remaining in storage. Chances are that mono will still see a larger demand than multi, thanks to the country‘s Top Runner program, yet both types will be affected.
As a result, BNEF believes that “best practice” module production costs will sink to $0.24 per watt.
These developments began when China’s National Development and Reform Commission (NDRC), the Ministry of Finance, and National Energy Administration (NEA recently announced that the new “2018 Solar PV Power Generation Notice” will effectively put a cap on new solar projects for 2018 and also reduce the feed-in tariff for solar. According to the announcement, there is “no new general solar capacity planned” for 2018. The sole exception are projects which are intended to reduce poverty in rural areas.