Module price madness
Falling solar panel prices were the defining trend in solar in 2024. In January, regular prices approached $0.15/W in an oversupplied market.
Energy price advisor OPIS reported prices below production costs of $0.087/W for the latest tunnel oxide passivated contact products (TOPCon) in mid-November 2024, and further declines are still rumored.
While low prices generally stimulate demand, oversupply is exacerbated by restrictions on orders. With more efficient technology rapidly emerging, buyers fear they will be left with outdated stocks. Tariffs and other trade measures keep imported products out of leading markets, especially the United States and India.
The rise of solar power in recent years has left many countries scrambling to upgrade their networks, and slow progress has been exacerbated by shortages of transformers and other equipment.
Consulting firm InfoLink has forecast a small annual increase in global solar demand through 2025, but has noted that there could actually be a pullback.
Most observers expect the PV oversupply to continue through 2025, with numerous bankruptcies among solar distributors and installers, while manufacturers generally manage to hold on. However, while the largest manufacturers weather the storm, InfoLink expects smaller, second- and third-tier producers to struggle in the near term and has predicted a “large-scale production capacity exit from the polysilicon segment by 2025.”
The China Photovoltaic Industry Association urged its members in early November not to bid solar panel prices lower than CNY0.68 ($0.09)/W in tenders. Chinese manufacturers have told us pv magazine they can get by from $0.12/W to $0.13/W.
Production goes global
Amid rising geopolitical tensions, many are realizing the dangers of relying on a single region for the supply of energy or related components.
S&P Global Commodity Insights expects that India will have an annual solar panel production capacity of 65 GW by 2024. Further expansion seems likely, judging by the Renewable Energy India Expo 2024, which was held in October. Indian manufacturers are looking to export, possibly to Europe and elsewhere, although the United States is currently their only viable destination. Polysilicon, wafers and cells are the next step and the Indian government will crack down on imported cells from April 2026.
According to the Solar Energy Industries Association, the U.S. Inflation Reduction Act (IRA) has helped fuel a pipeline of more than 40 GW module manufacturing facilities by mid-2024. Ingots, waffles and cells could be next, despite newly elected President Donald Trump’s criticism of the current policy. Much of the IRA budget was spent and solar energy grew during Trump’s first administration.
TOPCon overthrown?
InfoLink estimated an annual global solar cell production capacity of 1.1 TW in early 2024, of which 670 GW would be TOPCon, enough to meet global demand alone.
“As manufacturers have historically typically engaged in active R&D when profits were low, technical breakthroughs and cost savings are expected to accelerate during this period,” said InfoLink’s Alan Tu.
Laser-enhanced contact opening (LECO) improved TOPCon cell efficiency in the first half of 2024, but competing products are gaining ground. Longi and Aiko are betting on back-contact (BC) solar, with Longi installing a 27.30% efficient heterojunction cell, and Aiko showing a 25.2% efficient all back-contact (ABC) module at Intersolar Europe in June.
In 2024 we will also see the first commercial introduction of perovskite-silicon tandem modules, promising cell efficiency well above 30%. China’s Utmolight was among the exhibitors at the SNEC show in May, and Britain and Germany-based Oxford PV announced in September that it had delivered its first tandem modules to a commercial customer in the United States.
Grids at the limit
Finding space in electricity grids for new solar installations and managing the daily and seasonal peaks and troughs of renewable energy generation are increasingly challenging for aging networks built with centralized generation in mind.
The grid upgrades needed in almost every region will take some time to materialize, and few are moving with great urgency. An April 2024 survey by industry association SolarPower Europe found that while much of Europe has ambitious targets for solar installations by 2030, less than 50% of countries in the region have appropriate energy storage targets. Only two of these have planned sufficient investments in network infrastructure and only four have set demand response objectives. “Without proper energy system planning, solar projects will be held up, solar energy will be wasted and the business case for solar energy will be undermined,” Jonathan Bonadio, senior policy advisor at SolarPower Europe, warned earlier in 2024.
That warning is already sounding. In Europe and other regions, waiting times for connection to the electricity grid are increasing – sometimes lasting up to several years. As solar projects proliferate and seek to send them all onto the grid at the same time, grid curtailments and cannibalization of profits between projects are all too common.
Upgrading networks is a slow process, made worse by recent reports of shortages of transformers and other vital components. Faced with this challenge, 2024 has also seen a wave of innovative solutions from policymakers looking to accelerate connections: Poland’s latest energy law update provides a great example. In an effort to avoid congested electricity spot markets, private power purchase agreements (PPAs) are on the rise, as are hybrid systems that combine solar and wind power with energy storage to better spread generation throughout the day.
Battery tree
Energy storage is an important part of the solution to such network limitations and is increasingly seen as part of the sustainable energy equation. This was reflected in the launch of pv magazine‘s ESS News platform in 2024, dedicated to energy storage news.
The sector has also seen oversupply and price declines this year, with surprising reports of a drop below $50/kWh for Chinese-made two-hour battery systems. In China alone, nominal battery production capacity stood at 2.2 TWh at the end of 2023, almost double the 1.2 TWh of global demand that analyst BloombergNEF (BNEF) expects for 2024.
However, falling battery prices have boosted demand. BNEF also reported that prices for complete, turnkey systems have fallen by 43% from 2023, while the stationary storage market has increased by 61%.
An increase in energy density was one of the key trends in large-scale storage, as manufacturers innovated to squeeze more battery capacity into container-sized products. The switch to 300 Ah-plus cells and 5 MWh containers happened faster than expected.
Regulators in many regions are also working to create the conditions necessary to enable batteries to provide more services to the grid. That opens up more potential business models for battery companies. The promise of managing all these capabilities and ensuring owners get the most out of them saw the rise of ‘yield optimization’ software packages as another key trend in 2024. In some markets, such as Germany, battery revenues from sellers high, in other markets all eyes are on tenders. In Italy everyone is waiting for the Storage Futures Market tender, while many other European countries have introduced capacity market auctions. In the United States, emerging routes to market include PPAs and toll contracts that include energy storage assets.
There is also noticeable growth in commercial battery installations, mostly in addition to solar power generation capacity. Companies are looking to renewables as a hedge against high energy prices and installers are looking to markets that are less affected by grid capacity challenges.
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