TrendForce’s latest findings reveal that government incentives in China are boosting overall solar demand and creating a sense of supply tightness in the PV module market. This surge is expected to trigger a moderate demand peak in March and April 2025, likely pushing prices across the solar value chain higher in the second quarter.
In late January and early February 2025, China announced new solar and renewable energy pricing regulations. Starting May 31st, solar installation will no longer benefit from fixed feed-in tariffs and will instead be priced based on market dynamics. This has triggered an installation rush—particularly for distributed solar systems located on or near end-user premises—which are expected to reach peak installation levels in the second quarter.
While the solar industry continues to maintain production discipline, the “531 New Policy” has further stimulated downstream demand. Polysilicon suppliers upstream have maintained low utilization rates over the past few months and show no signs of ramping up output in the short term. Consequently, polysilicon prices are likely to continue rising into the second quarter, with market expectations pointing to CNY 45/kg.
However, demand is expected to contract significantly in the third quarter once the installation rush subsides. Since electricity costs account for about 30% of raw material manufacturing, producers are likely to increase production during the summer hydroelectric season to take advantage of cheaper electricity. This could potentially lead to oversupply and downward pressure on prices.
TrendForce notes that strong demand for wafers will continue into the second quarter, driven by the installation rush in China’s distributed generation market and recovering demand in other regions. Wafer prices are expected to keep rising with leading suppliers jointly raising prices and production remaining disciplined. Among them, 210R N-type (G12R N-type) wafers are expected to see the largest gains.
Meanwhile, April prices are projected to increase by over 3.5% MoM. While the wafer supply-demand balance remains stable in the second quarter, a sharp drop in demand is anticipated in the third quarter, which may cause wafer prices to fall depending on actual production levels.
On the cell front, rising module prices have begun to push up cell prices as well. Cell inventory levels remain healthy and most capacity expansion is concentrated among top-tier suppliers, which is supporting prices. In April, M10L TOPCon and G12 TOPCon cell prices are expected to rise by nearly 1.7% MoM, while G12R TOPCon may increase by 6.67%.
Given the pace of price transmission from downstream to upstream, cell prices are likely to be the first to respond to changes in module pricing. This upward trend may begin to shift in May, and by the third quarter, heightened competition is expected to drive continued price declines for solar cells.
TrendForce also highlights that the installation boom in distributed generation has led to a surge in module demand, which has prompted distributors to stockpile inventory aggressively. Leading module suppliers have raised prices multiple times, with spot prices hitting as high as CNY 0.73/W and average prices around CNY 0.70/W. Prices remain well-supported for now. Demand in other regions is stable, while traders in markets like Pakistan have increased imports, fearing that China’s rush to install will constrain global supply.
Looking ahead, demand may fall sharply as the installation peak passes by the end of the second quarter. Intense competition in the third quarter is expected to bring module prices back down to CNY 0.70/W—or even lower.
