Editor's note: This story has been updated since original publication to reflect the rapidly changing solar panel pricing environment. By 2023, more solar panels will be imported (44.5 GW in October, compared to just 33 GW expected in the calendar year), contributing to larger module inventories in U.S. warehouses and cheaper panels entering the market. The original headline "Trade policy could push U.S. solar panel prices higher than average" has been updated. Further updates from Solar Power World will follow in the coming weeks. Original story with updates:
Catchy headlines claimed that solar panel prices had reached a record high last year: After paying 73¢/W for panels ten years ago, the price had dropped to 15¢/W. But these lower prices all apply to Chinese-made solar panels that use a Chinese supply chain, a product category completely out of reach for American buyers. Due to trade policies such as the Uighur Mandatory Labor Protection Act (UFLPA), less than 0.1% of solar panels now come from China. In theory, the new prices U.S. contractors will pay for the modules will reflect a more expensive supply chain outside of China.
“Due to different trade policies and tariffs, the United States does not have the same supply as the rest of the world. Michelle Davis, global head of solar at Wood Mackenzie, said the supplies the U.S. can source and import are expensive.
Elisa Pearce, solar module market researcher at Wood Mackenzie, said modules imported into the US use non-Chinese polysilicon, which costs $7-10 per kg more than Chinese polysilicon.
“Customs and Border Protection recently released some Chinese polysilicon modules into the United States, but we're not sure if there will be a significant influx of Chinese polysilicon modules into the United States at this point. “It could definitely bring prices down,” he said .
The current oversupply of panels is contributing to lower panel prices globally. China is rapidly expanding its production capacity, and many manufacturers are pursuing vertical integration to reduce costs. As module manufacturers move to better technologies – such as larger wafer-type technology – older modules such as PERC designs and modules using smaller M6 wafers are less desirable for larger designs and may be too expensive to sell on the real estate market.
Credit: Nelnet Renewable Energy (formerly GRNE)
Solar panels made in the United States will continue to be more expensive than imported solar panels because our downstream supply chain has not yet been established. But Wood Mackenzie estimates that by 2026, U.S.-made panels will be cheaper than imported ones, based on domestic silicon wafers and cells.
Overall, global solar panel prices are outdated and above 20¢/W, Pierce said.
“We do not expect prices to return to the levels they were at at the start of the UFLPA. “The price will drop a little more,” he said. “Level 2 modules are already cheap. Tier 1 modules will cost more because they meet UFLPA requirements and have tracking documents, but we expect prices to drop in the future as customs allow more Chinese polysilicon into the United States.
This story is part of SPW 2024 Solar Trends. Read all about this year's trends here.
