---
title: "Solar industry facing whiplash from volatile equipment prices"
description: "Even as solar power grows into one of the world’s largest sources of new energy, the industry behind it is facing unprecedented volatility as a battle for profits intensifies."
type: "NewsArticle"
publisher: "Daily Maverick"
site: "https://www.dailymaverick.co.za"
section: "Business Maverick"
author: "Bloomberg"
author_url: "https://www.dailymaverick.co.za/author/bloomberg/"
canonical_url: "https://www.dailymaverick.co.za/article/2023-02-22-solar-industry-facing-whiplash-from-volatile-equipment-prices/"
published: "2023-02-22T06:07:47"
updated: "2023-02-22T06:08:50"
lang: "en-ZA"
word_count: 357
---

# Solar industry facing whiplash from volatile equipment prices

> Even as solar power grows into one of the world’s largest sources of new energy, the industry behind it is facing unprecedented volatility as a battle for profits intensifies.

By Bloomberg · Published 22 February 2023, 08:07 SAST · Updated 22 February 2023, 08:08 SAST

## Key points
- The solar industry has been on a roller-coaster ride of late, with the key material in solar panels - polysilicon - experiencing dramatic price fluctuations. Prices fell more than 40% over a few weeks and then rebounded more than 50% in less than a month. This volatility is affecting the entire supply chain and forcing manufacturers to adjust their pricing strategies. Major producers are reducing sales and building up inventories to support prices while cell makers have raised prices by as much as 8.5%. China Silicon Industry Association's next report, due Wednesday, is expected to provide further insight into the market. The solar industry is continuing its expansion despite these fluctuations, with record growth in demand for clean energy projected this year.
- Polysilicon prices have experienced a roller-coaster ride over the past two months, with prices falling more than 40% and then rebounding more than 50%.
- The volatility is causing major solar manufacturers to rapidly adjust pricing strategies as they seek to protect profit margins and market share.
- Major producers are reducing sales and building up inventories in response to the price fluctuations.
- Polysilicon prices are expected to eventually stabilise and begin sliding again as new production facilities come online.

## Content

The roller-coaster ride is best seen through the lens of polysilicon, the key material in solar panels. Prices fell more than 40% over the course of a few weeks starting in December, and then rebounded more than 50% in less than a month.

The volatility is rippling across the solar supply chain and pressuring manufacturing giants even as they plan expansions to provide the world with more clean energy needed to stave off the impacts of climate change.

“The solar value chain has undergone one of the most volatile two months in history, with major product prices bumping up and down by wide margins,” said Tony Fei, an analyst with BOCI Research. The firm said the volatility was the result of “extreme inter-segment competition for profits”.

Polysilicon prices began falling toward the end of last year as new plants came online. Major producers reacted in recent weeks by reducing sales and building up inventories to try to support prices. Low trading volume around the Lunar New Year holiday added to the volatility.

The ups and downs so far haven’t had an impact on overall solar demand, which grew by a record amount last year that is expected to be eclipsed this year. But it is causing multibillion-dollar solar giants to rapidly adjust pricing strategies as they whipsaw between seeking to protect profit margins and market share.

Just in the past few weeks, top wafer manufacturers Longi Green Energy Technology and TCL Zhonghuan Renewable Energy Technology raised prices by nearly 20% in response to the rebounding cost of polysilicon. That led to top cell maker Tongwei boosting prices by as much as 8.5%.

“Volatility is expected to continue in coming months as polysilicon producers and their clients who manufacture wafers compete to gain advantage in a declining price environment,” said [Alex Whitworth](https://www.woodmac.com/profiles/people-profiles/alex-whitworth/), a research director at consultancy Wood Mackenzie.

Polysilicon prices are expected to eventually stabilise and begin sliding again as new production facilities come online. The recent swings have made polysilicon price reports from groups like the [China Silicon Industry Association](http://siliconchina.org/2023/0215/29102.html)a closely watched industry beacon. The association will publish its next report on Wednesday. **BM/DM**