Towards the end of the previous year, the increasing polysilicon production capacity resulted in a significant plummet in its price. However, the downstream market began stocking up, and polysilicon plants became reluctant to sell, leading to a swift price recovery, now settling at 6.x million yuan per ton. This price volatility has impacted second-tier polysilicon companies, causing them to suffer losses, while the leading polysilicon companies have witnessed a reduction in their profitability. As a consequence, module prices have followed suit, experiencing a decrease of more than 30% compared to the prices at the end of last year. The decline in module prices has been further aided by the improvement in N-type cell efficiency, leading to a reduction of approximately 10% in electricity costs. This development has made new power generation projects increasingly attractive. Additionally, the El Niño climate phenomenon may have a further impact on the global power supply, particularly in emerging markets with weaker power systems. As a result, the demand for PV is expected to be catalyzed further. In late May to June, the PV manufacturing and the middle industry chain is in the de-inventorying process, and then the demand and production scheduling would show strong performance.
As we enter the N-type era, the industrial dividend is just beginning to unfold.
TOPCon, which has proven to be more efficient in power generation compared to PERC, has been gaining traction since its mass production commenced in early 2022. The efficiency and cost of TOPCon are continuously being optimized, leading to a widening gap between TOPCon and PERC technologies. After a year of market verification, downstream industries now have a deeper understanding of the advantages of N-type technology, and TOPCon has gradually gained recognition within the industry. This is evident from the significant increase in the bidding share of N-type in domestic projects, causing its modules’ premium to rise to approximately RMB 0.1/W. Despite several companies announcing large-scale production expansion plans for TOPCon, the actual progress has been slower than expected. Challenges related to yield, efficiency, and cost have emerged in the subsequent processes of production expansion. Moreover, while the overall production capacity of TOPCon is projected to increase nearly tenfold in two years, supply chain bottlenecks may limit its development to some extent. Pioneer enterprises with deeper knowledge accumulation and the ability to converge upstream and downstream resources are expected to maintain a competitive edge for an extended period.
The head enterprises dealing with auxiliary materials are also expected to witness further profitability and competitive advantages.
First, silver paste: its usage for TOPCon is 40 to 50% higher than PERC, indicating higher technical barriers and value-added potential.
Second, film: similarly, N-type modules using POE-type film boast high technical barriers, with the head enterprise demonstrating excellent management and cost control capabilities, and a profound understanding of the product and production equipment, thereby leading in the N-type era.
Third, glass: glass manufacturers are likely to benefit from an improvement in profitability due to adjustments in soda ash and natural gas prices, while policy tightening will provide strong support to glass prices.
Lastly, quartz: a tight supply of quartz is anticipated to lead to price increases in the future, given its price was increasing even with low production scheduling.
