Polysilicon Prices To Fall ‘Steeply’ By 2023-Start

Rethink Energy Expects Global Polysilicon ‘Overcapacity’ In Coming Decade

Polysilicon Prices To Fall ‘Steeply’ By 2023-Start

Rethink Solar Analyst Andries Wantenaar expects polysilicon prices coming down from 2023 onward as new capacity starts to come online. (Illustrative Photo; Photo Credit: Bjoern Wylezich/Shutterstock.com)

  • Rethink Energy expects polysilicon production capacity of the world to increase to 1,170,000 tons annually by H2/2022, up from 880,000 tons today
  • It sees prices starting to come down from 2023 onward, and new capacity leading to overcapacity during this decade
  • Western polysilicon production capacity to sustain demand, beyond Chinese supply chain, will depend on a combination of tariffs, sanctions and manufacturing incentives

Analysts at UK based market intelligence firm Rethink Energy see global polysilicon production capacity to increase to 1,170,000 tons in H2/2022, reaching 1,595,000 in H1/2023, up from 880,000 tons today, leading to its prices declining ‘steeply’ from the beginning of 2023.

In an update to its February 2022 report Polysilicon Manufacturing Forecast to 2020, Rethink Energy of Rethink Research argues that with so much capacity coming online in the next few years (3,848,000 tons by H2/2024), the next decade is likely to see overcapacity and ‘prices bumping along at marginal production costs’.

In H1/2023, it expects 216 GW worth of polysilicon to be produced, up from 125 GW in H1/2022, catering to growing demand.

Andries Wantenaar, Solar Analyst and Research Lead of the research paper titled Rethink consults Polysilicon crystal ball-finds instant solar relief, states, “If you look at the data coming out of organizations like China Minmetals Corporation and the China Photovoltaic Association you can see that it demonstrates capacity utilization of existing factories right now is almost 100% and new factories are being successfully ramped up in record time.”

Push is coming from not just Chinese polysilicon makers, but also downstream solar  manufacturers that are looking to secure-in-house supply. Remaining components of a solar module as glass, backsheets, etc., haven’t had such an impact as polysilicon on the overall cost of a module.

Sharing his views on western polysilicon production capacity, Wantenaar said its growth will depend on a number of factors as tariffs, sanctions and manufacturing incentives as those in Inflation Reduction Act in the US. He stressed that ‘it really will take a combination of all three to sustain a fully verticalized silicon-based photovoltaic supply chain anywhere outside of China’.

Countries like India and Indonesia, that are exploring this segment, can become exporters to Western wafer fabs if Chinese solar panels are barred completely from the US, European Union (EU) or other countries.

The full update is available to subscribers of Rethink on its website.

In its February 2022 report, Rethink Energy said it expects 2022 to be the 2nd and last year of current polysilicon shortage and by 2030 its global production capacity will be enough to manufacture PV worth 1 TW (see Enough Polysilicon For 1,000 GW PV By 2030).

In June 2022, Fitch Solutions also said global polysilicon production capacity may exceed 1 million ton by 2022-end (see Expect Solar Capex To Start Coming Down in 2023).

About The Author

Anu Bhambhani

Anu Bhambhani is the Senior News Editor of TaiyangNews. Anu is our solar news whirlwind. At TaiyangNews she covers everything that is of importance in the world of solar power.

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