Shortage of Solar Modules Likely to Continue Until First Half of 2021: Interview
Demand for solar to rise in 2021, JA Solar's Chen told Mercom
2020 has been a difficult year. As the year draws to an end, the world is still dealing with challenges posed by the pandemic. For the Indian solar industry, this year has also been marked by a renewed push for domestic manufacturing to reduce the country’s dependence on imports. Solar module prices have remained unstable due to the interplay of several factors exacerbated by explosions in China’s leading polysilicon manufacturing units. JA Solar’s Steven Chen, general manager for MEA and South Asia, discussed the widening demand-supply gap for solar modules and more in a conversation with Mercom.
Do you see the demand pattern in India changing over the next few years?
We were expecting an increase in the rooftop solar market over the next few years. However, the pattern may stay very similar to previous years, given the government’s uncertain attitude toward Basic Customs Duty. The utility-scale projects would still constitute the majority of the capacity while the rooftop sector ramps up. It might take some time for the rooftop segment to have a major share in India’s installed solar capacity.
India is one of the largest solar markets. How does the country’s shifting gear towards manufacturing affect global suppliers?
India is one of the largest markets for solar applications; however, India’s solar manufacturing is still behind the major global players in terms of size and technology. Although the Indian government promotes local solar manufacturing, the investment activity remains low. When it comes to requirements regarding the bankability of modules, be it quality, brand or price, imported modules remain the first choice these days.
Which are the most favorable markets globally for you currently?
As a leading solar manufacturer, we try to supply our modules to different countries around the globe and promote the development of PV industry. India definitely is one of the favorable markets that we are taking care of. Based on India’s good reputation and good clients, we plan to gain more market share in the years to come.
How do you see the market and the demand-supply cycle changing in 2021?
The demand will rise going into 2021 as many countries are putting more effort into promoting solar energy to cut carbon emissions and create a better environment. Many of the projects globally have been forced to postpone in 2020 due to the pandemic. We have seen many delayed orders that will be completed in the first half of 2021. We think that the market demand would remain strong going into 2021. The tight supply situation might not ease until the first half of 2021. Also, the industry is getting more concentrated. Most of the clients are now only talking to top players, so it could be a very different scenario if we look at tier 1 and tier 2 players separately.
What are the main factors impacting module prices currently, and how do you see them changing in the next quarter?
2020 has been an unusual year for the solar sector. The pandemic affected the manufacturing, logistics, and supply chain. A few accidents in the polysilicon factories hampered the supply and inflated the cost in a very short period. On top of that, the glass, EVA and other materials are also facing shortages, resulting in a price rise. We expect Q4 2020 and Q1 2021 to experience a shortage of solar modules and materials supplies.
What is your target for the upcoming fiscal year?
With our capacity expansion plan, we will definitely increase our market share in the global market. In the Indian market, we are also targeting a much higher market share than the previous years.
What is your module price forecast for next year?
The module prices rebounded at the end of July 2020 and towards the end of 2020 with the combination of accidents, hike in the material cost, and exchange fluctuations. This trend is likely to remain the same until the first half of 2021.
Any upcoming products that you would like our readers to know about?
The new generation high-efficiency module product—DeepBlue 3.0, which is based on 182mm x 182mm wafers, combining the advantages of upgraded mono PERC cell, half cut and MBB technology. The size and the electric parameters are well optimized to consider the industry and the system sides. DeepBlue 3.0 has advantages on both balance of system and levelized cost of electricity and helps increase solar systems’ energy yield.
On November 11, 2020, Mercom will hold a webinar that would discuss new solar technologies in the market right now and how these can help utility-scale developers to reduce project costs. Register yourself for the webinar here.
Ankita is an editor at MercomIndia.com where she writes and edits clean energy news stories and features. With years of experience in the news business, Ankita has a nose for news and an eye for detail. Prior to Mercom, Ankita was associated with The Times of India as a copy editor for the organization’s digital news desk. She holds a Bachelor’s degree in Psychology from Delhi University and a Postgraduate Diploma in journalism. More articles from Ankita Rajeshwari.