Chinese manufacturer drops the price of wafers for solar panels by 31%: we will see a concentration of the market
The world's largest manufacturer of solar power facilities reduced the prices of a key component for solar installations by nearly a third as it ramped up production. This threatens smaller producers and risks putting them out of business.
According to a Bloomberg report, Longi Green Energy Technology Co. cut silicon wafer prices by 31% following a sharp decline in solar silicon prices. The decline is due to the entry into operation of new production capacities. This drop comes after Longi cut prices by more than 27% in December.
These developments prompted the company president to warn that excess capacity would intensify competition beyond healthy levels and potentially drive smaller operators out of business .
Interestingly, Longi itself actively participates in the rush to expand production capacity. Earlier this year, the Chinese firm announced plans to invest the equivalent of $8.7 billion to build a production capacity of 100GW of solar wafers and 50GW of solar cells annually. So after these expansions we are witnessing an impressive show offered by economies of scale and their power to increase productivity.
This would effectively double Longi's current generation capacity, making it the owner and operator of the world's largest solar power generation base, Bloomberg reported in January.
The cost reduction should be good news for solar developers around the world, as long as governments allow them to buy panels imported from China. In recent months, both the wind and solar energy industries have struggled with rising raw material costs, which have hurt their profitability. However, in the long run we will see a concentration of the wafer market such as to allow a handful of producers, especially Chinese, the possibility of controlling the entire market.
Meanwhile, solar energy continues to expand into the world's leading market for low-carbon energy. According to a Hong Kong-based consultancy, China is expected to add about 120-140 GW of new solar power capacity this year, which is at least 40% more than that added in 2022. In the first four months of the year alone , more than 48 GW of new solar power capacity has been installed in the country.
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The article Chinese manufacturer drops the price of wafers for solar panels by 31%: we will see a concentration of the market comes from Economic Scenarios .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/produttore-cinese-cala-del-31-il-prezzo-dei-wwafer-per-pannelli-solari-assisteremo-ad-una-concentrazione-del-mercato/ on Tue, 30 May 2023 10:37:46 +0000.