Taiwan’s Market Update: The Amendments Made by the Council of Agriculture Set to Gravely Impact the Targeted Solar Installations
The Council of Agriculture recently set out to revise the regulation. In the future, there will be a strict control over the conversion of agricultural land to green power. For Taiwan’s budding solar energy market, this is a huge blow to every segment across the industry.
The existing 600 MW projects that have already undergone the conversion will not be affected for now. There are 1.5 GW projects that are under review, of which nearly 500 MW of PV projects are on project sites smaller than 4.792 acres. The said projects have been determined that they cannot be utilized. And the rest will be transferred to the central government for a review. Judging from deployment of the ground-mounted projects, the impact will not be small. Observing the overall market in Taiwan this year, the actual installed PV capacity may fall between 1 and 1.2GW of new PV installation, despite the original target of 2.2GW.
The quoted prices of modules and inverters are not affected for now, mainly because the current shipments are for the orders signed earlier. The impact of the Agricultural Committee’s revision of the policy is estimated to reflect on the prices of modules and inverters between 2020Q4 and 2021Q1.
The polysilicon segment continued the same dynamic from last week, where the market prices had been corrected at a steady pace. This week, the new sale prices of polysilicon companies have increased slightly. The price range of mono-grade polysilicon has narrowed to RMB 57-61 /KG. And the average price has been raised to RMB 57 /KG. The main reason behind the increase owed to the fact that the new manufacturing capacity of downstream wafer companies has gradually become available, which led to an increase in the demand for polysilicon.
On the other hand, the downstream segments had a rising demand for high-quality polysilicon in 2020. And overseas polysilicon companies continued to maintain its facility and reduce production in the first half of the year. Plus, there are even more polysilicon manufacturers carrying out their facility maintenance in July. Therefore the market supply decreased further than expected The overall market supply continued to be tight, coupled with an increase in demand. The prices of polysilicon kept rising slightly as a result.
The market demand for the overall wafer segment has gradually increased this week. And the wafer prices have remained stable. As July arrived, most of the first-tier companies have already signed the orders for July. The overall prices were stable. The demand inspired much optimism from the market. The price range of G1/M6 mono-Si wafers, in particular, remained between RMB 2.38-2.53 /pc and RMB 2.45-2.62 /pc, respectively. The operating rate of the corresponding wafer companies remained the same as before.
Regarding the multi-Si wafers, the demand for low-efficiency wafers has not yet emerged, while the demand for medium- and high-efficiency wafers somewhat recovered. The market was still sluggish. The prices have been hovering around RMB 1.180 /pc in the past month.
The market demand for cells has been emerging since June. And the prices of cells continued to inspire optimism this week. The overall cell market is in short supply at the moment. The orders for July have already been signed in June. Around the beginning of July, major manufacturers have begun to negotiate orders for August. Regarding mono-Si cells, the demand for M6 was strong due to China’s large-scale domestic projects. Still, the demand for G1 was weak. According to the feedback from some manufacturers, G1 wafers enjoyed a relatively large bargaining space. The price difference between G1 and M6 was RMB 0.02 /W.
The large-size wafers have been driving the upgrade of the product structure of the supply chain. The 500W+ high-power products of the first-tier module companies have made their market debut one after another by the beginning of July. It is expected that the downstream developers could be further encouraged to adopt and deploy this type of products in the future, accelerating the cell product rollover.
The module prices remained on its slightly downward trajectory, but the decline has narrowed. Regarding the module price trend, the overseas market prices of the modules basically have not changed much. Owing to the gradual emergence of new manufacturing capacity of the modules in the Chinese market, coupled with the fact that the sale prices of modules for large-scale photovoltaic projects have dragged the overall market prices down, the mono-Si module prices showed a slight decline in the Chinese market as a result. The prices of the high-efficiency mono-Si (315-320W) and superior high-efficiency mono-Si (>320W/385W), in particular, fell RMB 0.01 /W each. And their average prices fell to RMB 1.52 /W and RMB 1.54 /W. Some companies were worried that the sellers will be much more enthusiastic than the buyers in the near future. However, the first-tier module companies can still maintain a high operating rate. It is estimated that the prices of modules will slowly stabilize in the future.
Observing the non-Chinese markets in recent times, the pandemic in the U.S. is surging back up, which caused more than 10 states to postpone their reopening plans. Among the emerging markets, the pandemic has been easing in Chile. The pressure nevertheless continued to persist in Brazil, India and other countries. In the future, it is still necessary to closely pay attention to the market risks involving demand fluctuations, which have been caused by the pandemic development in these countries.
(Analysis provided by Sharon Chen, analyst at EnergyTrend. Translated by Emma Hsu, translator of TrendForce Corp.)