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The outlook for the monocrystalline silicon market is booming.
Release time:
2022/05/30
At the recently held “PERC Technology Trends and Development Forum,” experts predicted that by 2020, the total production capacity of monocrystalline PERC will reach 65 gigawatts, and shipments will account for 50% of the entire market. It is understood that in current industrial-scale production, monocrystalline PERC lines with high efficiency can achieve yields exceeding 21.5%, making monocrystalline PERC the most attractive technological solution.
At the recently held “PERC Technology Trends and Development Forum,” experts predicted that by 2020, the total production capacity of monocrystalline PERC will reach 65 gigawatts, and shipments will account for 50% of the entire market. It is understood that, in industrial-scale production today, monocrystalline PERC production lines with high efficiency can achieve yields exceeding 21.5%, making monocrystalline PERC the most attractive technological solution.
Industry insiders told reporters that, at present, cost reduction through economies of scale has nearly reached its “floor,” and continuous technological innovation has become the most effective means for photovoltaic power to achieve grid parity. Moreover, driven by the nation’s high-efficiency “Leading Runner” program and the growing demand from downstream markets for high-power modules, the market share of monocrystalline silicon will gradually expand.
Single-crystal silicon is showing a strong recovery trend.
Currently, in the global solar power generation market, crystalline silicon-based photovoltaic systems account for more than 90% of the market share. As of the end of 2014, polycrystalline products held a 70% share of the global crystalline silicon market. However, in recent years, driven by factors such as the booming demand for monocrystalline silicon in developed countries like the United States, Japan, and Germany, as well as strong domestic downstream market demand, sales of domestic monocrystalline silicon manufacturers have surged.
The reporter noted that as early as the second half of 2014, SolarCity invested $350 million to acquire Sanyo Power, a company whose flagship products were high-efficiency N-type monocrystalline cells, thus embarking on the monocrystalline silicon route. In early 2015, Longi, the world’s largest manufacturer of monocrystalline silicon photovoltaic products, integrated Leye Photovoltaic and officially entered the manufacturing and sales of monocrystalline silicon modules. From the very beginning of its market entry, it demonstrated rapid growth momentum.
It’s worth noting that at the beginning of last year, Leyue Photovoltaic signed strategic agreements with six photovoltaic power plant developers. Under these agreements, over the next three years, Leyue Photovoltaic and its parent company, LONGi Green Energy Technology, will supply Zhongmin New Energy with no less than 4.3 gigawatts of monocrystalline modules; LinYang Energy with no less than 3 gigawatts of monocrystalline silicon wafers/batteries; China Merchants New Energy with no less than 1.8 gigawatts of monocrystalline modules; Shandong Tianen with no less than 1.5 gigawatts of monocrystalline modules; and Zhongsheng Wuxi and Tianhong Sunshine with no less than 1 gigawatt each of monocrystalline modules. Moreover, Leyue Photovoltaic currently ranks among the world’s leaders in both the mass-production scale and conversion efficiency of PERC monocrystalline cells and modules.
In 2016, Longi Green Energy Technology achieved remarkably impressive results. According to the company’s earnings forecast, Longi’s sales revenue exceeded 10 billion yuan, representing an annual growth rate of around 100%. Its net profit reached between 1.4 and 1.6 billion yuan, making it one of the best-performing companies in the photovoltaic industry.
In addition, in its 2016 annual report, Zhonghuan Shares stated that in 2016, demand from clients for monocrystalline products continued to rise, while the market’s effective production capacity fell short of meeting this demand. As a result, the monocrystalline silicon wafers produced by Zhonghuan Shares have earned the trust of customers and remain persistently in short supply. In fact, last year, sales at all domestic monocrystalline companies were generally robust.
According to information obtained by our reporter, in 2014, the domestic market share of monocrystalline silicon was around 5%. By the end of 2015, this figure had risen to over 15%. In 2016, the domestic market share of monocrystalline silicon made an even more dramatic leap, exceeding 27%. In the first half of 2017, the photovoltaic market continued the robust demand trend seen in 2016 for monocrystalline silicon wafers; in the second half of the year, demand for high-efficiency products is expected to keep rising, and the market share of monocrystalline products will continue to grow.
It is worth noting that in 2006, in the field of crystalline silicon products, monocrystalline and polycrystalline silicon accounted for roughly equal shares. From this, it is not difficult to see that monocrystalline silicon is currently showing a strong trend of making a comeback.
Reducing costs and improving efficiency is a practical necessity.
For a considerable period in the past, polycrystalline silicon has dominated the crystalline silicon market, and one important reason for this dominance has been the relatively high production cost of monocrystalline silicon.
Wang Shijiang, Deputy Secretary-General of the China Photovoltaic Industry Association, stated that the upward trend in monocrystalline products began in 2015, and the key to this trend lies in technological breakthroughs that have driven down costs. This is reflected in two main aspects: First, monocrystalline silicon wafers have shifted from slurry wire cutting to diamond wire cutting, increasing cutting efficiency by more than 50%; second, the adoption of continuous crystal-growth technology has boosted the productivity of monocrystalline silicon ingots, thereby increasing output and reducing costs.
As costs decline, prices naturally fall as well. Since 2016, the cost of monocrystalline silicon has dropped rapidly, and the cost advantage of monocrystalline silicon has become increasingly evident. In the future, the price gap between monocrystalline and polycrystalline modules will narrow to between 0.01 and 0.02 U.S. dollars per watt, making monocrystalline products increasingly cost-effective. It is reported that monocrystalline companies—led by Longi—are now able to reduce their crystal-growing costs to between 40 and 50 yuan per kilogram, equivalent to just 1.9 to 2.3 U.S. cents per watt. Even after polycrystalline manufacturers have completed their transitions to diamond wire sawing and black silicon technology, their cost advantages remain relatively insignificant. With the substantial drop in monocrystalline prices, monocrystalline products are gradually gaining the competitiveness needed to challenge polycrystalline products.
The industry insider quoted above told reporters that technological advancement will determine the future of the photovoltaic industry. Photovoltaic companies need to anchor themselves in technology, enhance their R&D capabilities, and improve the conversion efficiency of their products. By boosting efficiency, they can drive down costs. Only when cost reduction and efficiency enhancement proceed hand in hand can the photovoltaic industry achieve grid parity and move toward a subsidy-free future.
Compared to polycrystalline modules, what exactly are the advantages of monocrystalline modules? According to what our reporter has learned, at the power plant operational level, monocrystalline modules can save 5% on land rental costs and 6% on operation and maintenance expenses compared to polycrystalline modules. Moreover, the power output per watt from monocrystalline modules is at least 3% higher than that from polycrystalline modules. Under a financing structure with a 25% equity ratio and a 15-year loan term, the internal rate of return on equity for investing in monocrystalline power plants in China’s central region would be at least 2.78 percentage points higher than that for investing in polycrystalline power plants.
In addition, conclusions drawn from operational data of a 20-megawatt photovoltaic power plant in Golmud, Qinghai Province, show that under normal conditions (not affected by power restrictions), the 10-megawatt monocrystalline silicon PV array generated 7.82 million kilowatt-hours more electricity from 2013 to 2015 than the 10-megawatt polycrystalline silicon PV array—a 4.58% higher output for monocrystalline silicon compared to polycrystalline silicon. This represents tangible benefits for our customers.
It’s clear that, as photovoltaic subsidies are gradually reduced, more project developers will increasingly focus on controlling the levelized cost of electricity. High-efficiency monocrystalline silicon products will gradually gain wider recognition.
Distributed photovoltaics boost the development of monocrystalline silicon.
Notably, since its launch in 2015, the “Leader” program has set different minimum efficiency thresholds for both monocrystalline and polycrystalline modules—17% for monocrystalline modules and 16.5% for polycrystalline modules. After a year of testing, approximately 20% of polycrystalline products met the “Leader” program standards, while nearly 100% of monocrystalline modules complied with the standards, directly spurring the rapid development of China’s monocrystalline silicon market.
It is reported that in 2016, driven by China’s “Leading Runner” initiative, monocrystalline modules experienced rapid growth, achieving the remarkable feat of capturing more than three times the market share of the overall monocrystalline segment. At the first Datong “Leading Runner” base, the share of monocrystalline modules exceeded 60%.
The reporter noted that the “2017–2020 Photovoltaic Power Station New Construction Scale Plan” recently released by the National Energy Administration proposes allocating 8 million kilowatts of capacity annually for leading-edge demonstration projects from 2017 to 2020. Clearly, in the coming years, the country will continue to vigorously promote the “Leading-edge” initiative.
Data released by the National Energy Administration show that in the first half of 2017, the country added 7.11 million kilowatts of new distributed photovoltaic capacity, representing a year-on-year increase of 2.9 times. The development of distributed photovoltaic installed capacity continues to accelerate, and even as photovoltaic subsidies are gradually reduced, the pace of distributed PV development is set to pick up further.
Ding Wenlei, founder of Hangyu Energy, stated that in distributed power generation—particularly for rooftop power stations—using monocrystalline silicon allows for greater installed capacity and power output within a limited rooftop area. “Rooftop resources are even more precious.” The advantage of distributed generation lies in its ability to consume energy locally. Moreover, the enthusiasm for monocrystalline silicon in countries like Germany and Japan clearly reflects the growing trend in demand for monocrystalline silicon in distributed systems.
It’s clear that distributed energy systems place greater emphasis on conversion efficiency. According to the “13th Five-Year Plan for Power Development,” during the 13th Five-Year period, installed capacity of distributed photovoltaic systems should reach over 60 million kilowatts.
In summary, it is not difficult to conclude that, in the coming years, “leaders” and distributed photovoltaic systems will strongly drive the development of the monocrystalline silicon industry.
According to estimates by relevant institutions, as the photovoltaic market continues to grow and the “Leading Runner” program is actively promoted, high-efficiency solar cells will become the market leader. The market share of monocrystalline silicon cells will gradually increase, reaching 48% by 2025. Among these, the market share of N-type monocrystalline silicon cells will rise from 3.5% in 2016 to 30% by 2025.
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