Attention-grabbing headlines in the last year exclaimed that solar panel pricing had reached a record low — after paying nearly 73¢/W for panels a decade ago, prices have fallen to 15¢/W today. But that rock-bottom pricing is for solar panels made in China using an entirely Chinese supply chain, a category of product that is not accessible to U.S. buyers. Due to trade policies like the Uyghur Forced Labor Prevention Act (UFLPA), less than 0.1% of imported solar panels now come from China. The new prices U.S. contractors pay for modules reflect more expensive supply chains from outside China.
Credit: Wood Mackenzie
“Because of various trade policies, because of tariffs, the U.S. does not access the same supply that the rest of the world does. The supply that the U.S. can access and import is expensive,” said Michelle Davis, head of global solar at Wood Mackenzie. “On top of that, because supply is more constrained, you have pricing being elevated from supply/demand dynamics in the market.”
Elissa Pierce, solar module market research associate at Wood Mackenzie, noted that the modules imported into the United States use non-Chinese polysilicon, which is about $7-10/kg more expensive than Chinese polysilicon.
“Customs and Border Protection has recently released some modules with Chinese polysilicon into the United States, but we’re not sure if there is going to be a huge influx of modules with Chinese polysilicon coming into the U.S. now. It’s possible, and this could definitely drive down prices,” she said.
A current oversupply of panels is also contributing to lower prices globally. China is rapidly expanding its manufacturing capacity, with more manufacturers becoming vertically integrated to lower costs. As module manufacturers switch over to better technologies — namely, n-type technology and larger wafers — older modules, like PERC designs and those using smaller M6 wafers, are less desirable for larger projects and may be priced to sell for the residential market. These modules would first need to prove they are UFLPA-compliant before entering the U.S. market, but having access to cheaper modules would be welcome — SEIA and Wood Mackenzie data shows that U.S. module buyers across all markets are paying close to 50¢/W.
Credit: Nelnet Renewable Energy (formerly GRNE)
Solar panels made in the United States will continue to be more expensive than imports solely because our upstream supply chain is not yet established. But Wood Mackenzie is predicting that American-made panels will become cheaper than imported panels by 2026, boosted by domestic silicon wafers and cells.
In general, global solar panel pricing of more than 20¢/W is a thing of the past, Pierce said.
“We’re not expecting prices to go back up to what they were at the beginning of UFLPA. Prices are going to even decrease slightly,” she said. “Tier 2 modules are already at lower prices. Tier 1 modules [in the United States] are a bit higher because they’re UFLPA-compliant and have their traceability documents, but in the future, as Customs allows more Chinese polysilicon into the U.S., we’re expecting to see prices decrease.”
This story is part of SPW’s 2024 Trends in Solar. Read all of this year’s trends here.
