Category
Author Richard Chen
Updated June 02, 2023

The 16th edition of SNEC PV Power Expo came to an end on May 26 in Shanghai. InfoLink provides insights of the industry trends this year.
 

Optimistic shipment volume amid booming market

In the first quarter, Europe and Brazil saw large volume of inventory draw, while US demand gradually picks up, the Middle East market is on the rise, and China’s installations beat forecast, indicating significant growth in these regions. As a result, PV manufacturers continue to raise shipment target this year, with some of which optimistically expecting 470 GW to 500 GW of shipment volume during the exhibition period, an increase of 70% from the previous year. Overall, the industry is confident in this year’s market growth.

Despite solid demand in the first quarter, the market growth could be hindered by several factors, including some PV plants’ preference over modules made outside of China, regional economic slump, and stockpiled inventory due to low consumption. These may be potential issues that impact the market. InfoLink projects global module demand to come in between 385 GW and 450 GW this year. 
 

Excess supply to drive down prices  

As large volume of new capacity came online this year, serious shortage in the upstream sector has eased and gradually become surplus. Polysilicon output has been increasing rapidly since early 2023 and thus inventory has piled up alongside. Consequently, polysilicon prices, which had sustained at RMB 300/kg last year, dropped within a short period a time. During the exhibition, prices have declined to around RMB 120-132/kg. Meanwhile, surplus supply may exacerbate as new capacity continue coming online while wafer makers have plans to cut production recently. The industry has shifted focus from supply bottleneck to price declines. 

As polysilicon prices decline and ingot capacity expands rapidly, the wafer sector also faces inventory problem, with prices falling markedly. Some wafer manufacturers have lowered utilization rates to adjust prices, but the real impact of production cut on prices will not manifest until mid-June. Therefore, supply will remain surplus in the wafer segment for the short term.

Supply and demand in the cell segment is relatively stable, running at full capacity and have all products sold. The inventory is kept at a level of five-day supply. The industry now pays more attention to n-type capacity expansion. InfoLink estimates that the nameplate TOPCon capacity will reach 629 GW by the end of this year, although the actual output depends on production lines debugging and the time equipment arrives. Judging by the current situation now, TOPCon cell production may grow significantly during June and July. The shipment of TOPCon cells is likely to reach 120 GW this year.

With prices dropped markedly in the upstream, end users are biding their time. Some medium and small-sized module makers revised down production. Moreover, slight price decline during the exhibition also indicates slower-than-expected consumption. As of this month, some module makers have inventory piled up for two months, with the average inventory level sitting at one and a half month long. Module prices are likely to decline continuously along with upstream prices.

From the polysilicon to the module segment, each segment saw capacity becoming surplus this year. Although short-term change to supply and demand may cause prices to fluctuate, the industry in general expects prices to decline. In response, manufacturers will adjust utilization rates in accordance with price movement. 

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Technological change accelerates arrival of n-type era

This year’s SNEC saw most manufacturers focusing on promoting TOPCon, HJT, and xBC products, with TOPCon the spotlight of the year. Most leading manufacturers showcased TOPCon products, underpinning the dominance of TOPCon for the short term. Other technologies such as HJT and xBC also emerged, attracting more attention. These are signs that the industry is facing a technology change, during which cell technique will shift to n-type. While n-type capacity will expand rapidly this year, capacity added in the second half will not come online until 2024 given the time a new production line takes to commission and increase activity. In light of this, InfoLink believes the PERC products will remain the mainstream in 2023, while the share of n-type shipment will come in at 25-30%. Next year, n-type products will increasingly overtake the market share of PERC, leaving at around 20-30% only. Amid excess capacity, technology development underlines the importance of manufacturers’ technology capability in business strategy. 

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Seawater floating PV draw eyes

Except modules with high power output, some manufacturers displayed modules for seawater. As ground-mounted PV being deployed at a fast pace, land acquisition becomes increasingly difficult. In addition to ground-mounted and distributed generation projects that continue connecting to the grid, seawater floating PV has been developing in recent years. Especially in China, where most floating PV projects on ocean have begun construction and ran small tests. After resolving reliability issues such as soil salinization and loading, seawater floating PV are likely to come online next year. At this year’s SNEC, Huasun displays Himalaya G12-132 modules for seawater floating PV projects, while Astronergy introduces ASTRO N5 modules. 

Since salt damage and water resistance reliability issues are particularly important in nearshore areas, module manufacturers need solutions to such issues, and should be extra carefully with the selection of brackets, module frame, and encapsulation.

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Huasun and Astronery launches modules for seawater floating PV
 

Rectangle wafer gains popularity 

To better utilize container space and the remaining space between cells on module, leading manufacturers have started to design rectangle wafers with 182mm width. At present, the common condition for module format is: small format with an area of 2m2 (taking into account Europe’s building regulation); large format with length ≤2386mm (taking into account standard container dimensions). This year, for 72-cell/182mm large format modules, most manufacturers display modules with 2380*1134mm format, meaning that 182*191/192mm wafer is more widely adopted. However, small format modules using 182*191/192mm wafers have an area that exceeds 2m2. Moreover, the 182*199mm rectangular wafers launched by JA Solar received the highest attention at the event, for small format modules can be made into 1762*1134mm size and large format modules can be made into three sizes of 2333/2384/2465*1134mm, and both boundary conditions are met. Whether other manufacturers will follow suit remains to be heeded. 

Although most manufacturers showcase modules featuring rectangular wafers, but from information exchanged during the exhibition show that, most manufacturers have yet to decide the size for mass producing rectangular wafer; the size still needs to be unified.

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The crowd, attention, and the scale of this year’s exhibition reflect the rapid development of the solar industry over the two years of stagnation due to the pandemic. Not only the market scale has expanded significantly, but also the technology and information are changing rapidly. However, quite a few industry players are concerned about the overheated market, which could lead to severe competition. In response, manufacturers will start to prepare in advance.

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