The solar photovoltaic (PV) industry has been witnessing a significant shift in recent times, with the price of polysilicon, a key raw material used in the manufacture of solar cells, experiencing a steep decline. This trend has been largely driven by an oversupply of polysilicon in the global market, particularly from China, which has led to a deceleration in the price fall as it reaches the ground floor¹.

The Global Oversupply Concerns

China, being the world’s largest producer of polysilicon, has been instrumental in driving down the prices. The country’s polysilicon industry has been grappling with an oversupply situation, which has led to a significant reduction in prices. This has been attributed to the rapid expansion of production capacity by Chinese manufacturers, which has outpaced the growth in demand¹.

This oversupply situation has raised concerns about the sustainability of the polysilicon industry. However, it has also presented an opportunity for the solar PV industry to reduce its production costs and make solar energy more affordable.

Recent Price Trends

The price of polysilicon has been on a downward trend in recent months, with the Global Polysilicon Marker (GPM), the benchmark assessment for polysilicon manufactured outside China, declining for several consecutive weeks. As of May 9, 2023, the GPM stood at $35.789 per kilogram (kg), marking a 0.12% decrease on a week-on-week basis¹.

The domestic market in China has seen a more drastic fall in prices. Average polysilicon prices in China plummeted by a steep 8.81% to CNY158.83 ($22.86)/kg in the same week. This drop, sustained across eleven consecutive weeks, underscores the significant pressure faced by China’s producers who are grappling with surplus material that is difficult to clear¹.

By June 2, 2023, the GPM plunged for the first time in three weeks to $32.171/kg, marking a 7.25% decline, the largest percentage drop in GPM so far that year. Most sources reported ex-China polysilicon prices at or below the psychologically significant level of $30/kg. A tier-one module maker agreed to buy polysilicon at $29/kg from a global producer².

In China, polysilicon prices hit their lowest level in four months at 126.67 CNY ($17.7)/kg. The market anticipates that polysilicon prices in China will drop below 100 CNY/kg very soon².

These trends highlight the significant impact of the global oversupply situation on polysilicon prices. The rapid fall in prices has raised concerns about the sustainability of the polysilicon industry, but it has also presented an opportunity for the solar PV industry to reduce its production costs and make solar energy more affordable.

Date	Global Polysilicon Marker (GPM)	China Mono Grade
May 9, 2023	$35.789/kg	CNY158.83 ($22.86)/kg
June 2, 2023	$32.171/kg	CNY126.67 ($17.7)/kg

Please note that the Global Polysilicon Marker (GPM) represents the benchmark assessment for polysilicon manufactured outside China, while the China Mono Grade represents the average polysilicon prices in China. The prices have been on a downward trend due to the global oversupply situation.

Impact on the Solar PV Industry

The fall in polysilicon prices has had a profound impact on the solar PV industry. It has led to a reduction in the cost of solar PV modules, making solar energy more competitive with other forms of energy. However, it has also put pressure on manufacturers to reduce their production costs in order to maintain their profit margins¹.

The cost of polysilicon constitutes a significant portion of the total cost of a solar PV module. According to a report by PV Magazine, polysilicon costs have slid by 96% per watt over the past two decades². The typical composition of the module price is as follows²:

Component	Percentage of Total Cost
Polysilicon	20%
Other Raw Materials	35%
Labor	25%
Overhead	20%

Technological Developments

Technological advancements have played a crucial role in reducing the usage of polysilicon per watt. According to a report by the National Renewable Energy Laboratory (NREL), there have been significant improvements in the efficiency of solar cells, which has led to a reduction in the amount of polysilicon required per watt³.

These advancements have not only helped in mitigating the impact of the polysilicon price fall but have also contributed to the overall growth of the solar PV industry by making solar energy more efficient and affordable³.

Leading Polysilicon Manufacturers

Despite the challenges, several companies have managed to maintain their position in the polysilicon market. The top five leading polysilicon manufacturers are as follows⁴:

Rank	Company	Country
1	Wacker Chemie	Germany
2	GCL-Poly Energy	China
3	OCI Company	South Korea
4	REC Silicon	Norway
5	Daqo New Energy	China

In conclusion, the fall in polysilicon prices, driven by an oversupply situation, has had a significant impact on the solar PV industry. While it has presented challenges for manufacturers, it has also created opportunities for the industry to reduce its production costs and make solar energy more affordable. Technological advancements have further helped in mitigating the impact and driving the growth of the industry.

Footnotes

1. China polysilicon price fall decelerates as it reaches ground floor ↩ ↩² ↩³
2. Polysilicon costs have slid by 96% per watt over past two decades ↩ ↩²
3. NREL Report ↩ ↩²
4. Top Polysilicon Manufacturers ↩