Is there a downward trend in solar module prices? According to a survey by developer LevelTen Energy, due to challenges such as increasing solar demand, economic fluctuations, and supply chains, the price of solar modules in the United States has continued to rise since 2020 and pricing will continue to increase with the demand for renewable energy in the future. Just in 2021, US firms purchased 17GW of green energy, setting a new record.
BloombergNEF reported that in 2021, global corporate renewable energy power purchase agreements (PPAs) set a new record of 31GW, of which 17GW came from the United States. Europe also signed 12GW of renewable energy due to rising natural gas prices. However, PPAs in Asia declined sharply in in 2020 with new renewable energy contracts in 2021 coming in at only 2GW.
For companies, purchasing solar energy is still the first choice. The BloombergNEF report pointed out that most companies choose solar energy as a method to increase the number and capacity of PPAs.
This may also be one of the reasons why the price of solar energy in the United States has risen, rather than the price of electricity. BloombergNEF believes that one key reason is that many companies have joined RE100. In 2021 alone, 67 companies have invested in RE100, so now 355 companies have committed to achieve the goal of 100% renewable energy in a certain year. Global trends and social pressure naturally drive solar demand. LevelTen Energy's Q4 2021 PPA Price Index report shows that solar module prices rose 5.7% to $34.25/MWh.
Although price increases vary by region, the average increase in the United States is 12.1%, with price increases in the Electric Reliability Council of Texas (ERCOT) region at less than 6.9% and by more than 20% in the Southwest Power Pool (SPP) region.
Taiwan's solar module prices are expected to decline in the third quarter
For Taiwan, 2021 was also a year full of fluctuations in the price of solar modules. Pricing at the beginning of the year was still excellent but rose unexpectedly over the coming months. Solar industry analyst Sharon Chen pointed out that in 2021, various industries around the world were severely affected by the increase in raw material pricing, with module raw material polysilicon increasing by as much as 165%. The price of modules in Taiwan also increased by as much as 66%. In addition, the shortage of materials in 2022 will lead to delayed lead times. Entering the third quarter, the price of modules in Taiwan is expected to fall with the large-scale production of module raw material polysilicon.
In 2021, there were also many large and medium-sized system providers in Taiwan whose grid-connected performance is not as good as expected. Sharon Chen pointed out that, due to the short-term spiking of copper and steel prices, it was difficult for construction to begin at project sites. The shortage of workers intensified in the third quarter due to the pandemic. Although the government increased the wholesale purchase rate by 5% in the fourth quarter to make up for this, most projects were delayed because modules could not be delivered smoothly.
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