Supply of silicon materials has become volatile as a direct result of challenging conditions in the upstream segment of the photovoltaic industry. Rising prices are likley to impact installations in the second half of the year and into 2021.

Major polysilicon makers Daqo New Energy, GCL-Poly and most recently Tongwei have been affected by accidents, flooding and maintenance issues resulting in shortage of supply and increased prices. As a result, prices along the PV silicon value chain have begun to climb, signalling higher project costs going into 2021. Data and research firm Trend Force has seen an increase in average wafer costs of 10%.

LONGi Solar has raised prices on its mono wafers by 7% to account for higher input costs.

“The price of LONGi silicon wafers fell sharply in the past year up to May 2020,” said Dennis She, senior vice-president at LONGi Solar.

“The recent price adjustments of silicon wafers are based solely on the principle of digesting the increase in raw silicon material costs. LONGi has not increased prices due to forces of demand and supply.”

Most large-scale PV projects will order modules six months before delivery and developers around the world looking to secure supply for onsite installations at the end of 2020 and early 2021 are being forced to reassess their project economics. A lack of pricing certainty is forcing some projects to be suspended.

In Australia, where the large-scale segment of the market is dealing with financing, curtailment and logistical headwinds, price rises couldn’t come at a worse time.

LONGi Australia managing director Stephan Zhang said the company will “moderately adjust prices within a range that is acceptable to our customers”.

Module supply constraints and short-term price volatility may plague developers in Australia over the coming quarter. LONGi Solar Australia, as an integrated manufacturer of modules, is able to help cushion price shocks along the supply chain and remains committed to long-term manufacturing expansions to achieve optimal LCOE for solar installations.

“It is estimated that by the end of 2020 our capacity for monocrystalline modules will reach 25GW or beyond,” Zhang said. “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.”

Zhang said the company is working with key partners to agree price adjustment mechanisms.

“LONGi is in the Australian market for the long term. We are not focused on making quick money in the spot market.” said Zhang, “LONGi does not want to see a sharp rise or fall in module prices, as neither is a positive for the industry long term.”