The price of polysilicon can be an indicator of the direction in which solar module prices will develop. So how did one of the world’s largest polysilicon producers fare in the third quarter?
Solar polysilicon – a very pure form of silicon – is a key material in the production of cells for solar panels. One of the most productive producers is the Chinese company Daqo New Energy.
Last week, Daqo announced its unaudited financial results for the third quarter of 2024, which looked pretty bleak from a manufacturer perspective. Some highlights:
- Production volume was 43,592 tons in the third quarter of 2024, compared to 64,961 tons in the second quarter of 2024.
- Sales volume was 42,101 tons in the third quarter, compared to 43,082 tons in the second quarter.
- Revenue was $198.5 million, compared to $219.9 million in the second quarter of 2024 and $484.8 million in the third quarter of 2023.
- Average total production costs were $6.61/kg in the third quarter, compared to $6.19/kg in the second quarter and $6.52/kg in the third quarter of 2023.
- The average selling price was $4.69/kg in the third quarter, compared to $5.12/kg in the second quarter and $7.68/kg in the third quarter of 2023.
Ouch. And looking back even further, Daqo’s average polysilicon selling price was $36.44/kg in the third quarter of 2022, while the average production cost was $6.82/kg. Revenue for the quarter was $1,219.7 million.
“Challenging” market conditions
Commenting on the third quarter, Xiang said the situation is largely due to the oversupply of polysilicon and panels, which has caused competition to be even fiercer last year than the previous year.
One of the challenges of a price race to the bottom is that you could win.
“Market selling prices continued to be below production costs for the majority of industry participants along the entire value chain,” he said.
In the third quarter, Daqo used market conditions as an opportunity to perform maintenance on its facilities and adjusted production utilization to 50%. Based on the situation, Daqo expects that the total production volume of polysilicon in the fourth quarter of 2024 will be about 31,000 to 34,000 tons, and the production volume for the full year 2024 will be in the range of 200,000 to 210,000 tons.
Rock-bottom prices for polysilicon and panels can’t last forever – and there has been some action on that front. Mr.
“…we believe this is a positive signal of market consolidation as more costly and inefficient manufacturers gradually reduce capacity and exit the business,” he said.
Also in October, CPIA announced a “reference price” of 0.68 RMB/W for modules, setting a floor for the surcharge. In Australian dollars at current exchange rates it’s only about 14 cents per watt and still peanuts. This is wholesale, but some of the retail price estimates in SolarQuotes’ solar panel comparison chart are staggering. For example, in Australia, high-quality 440-watt solar panels retail as part of a system for around $150. My first panel was a 100 watt module that I paid $1,000 for in 2008.
As for the larger and current picture of polysilicon, Bernreuter reports that prices remained unchanged through the week ending October 30, after rising slightly in August. The global average price was US$6.04/kg, with any increase due to exchange rate fluctuations.
A good time to switch to solar energy
Given the high electricity tariffs on the public power grid, it is always a good time to install a solar power system. But right now it’s a particularly wonderful time.
While manufacturers are pushing hard, it’s an ill wind that does no one any good, as they say, and consumers are the winners for now as prices for solar power systems are low. But before you dive in and sign the dotted line on a system, check out SQ founder Finn’s popular Solar 101 guide. Here you’ll find everything you need to know before buying solar – in plain English.
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