The sustained high prices of polysilicon are raising costs for global solar manufacturers.
Source: IHS Markit
Polysilicon prices increased by 175% between January and mid-June 2021. The production cost significantly increased quarter over quarter.
Prices for other components in the solar panel supply chain also rose, leading to an overall production cost increase of 5.9% in Q1 of 2021 from Q4 of 2020.
The higher prices also contributed to the increase in the average selling price of a solar module rose by 3.7% in Q1 of 2021.
The higher costs translated to a lower profit margin for solar module makers over the same period as demand stands at high levels globally.
IHS Markit stated that the higher current demand for solar following declined demand in early 2020 from the Covid-19 pandemic.
Polysilicon manufacturers posted strong earnings fueled by the high quality of products for both highly efficient solar cells and semiconductor applications and by strong customer demand in a tight market.