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A global shortage of polysilicon caused by pandemic-related supply chain disruptions led to a spike in solar panel prices. Now China, the world’s largest producer of solar panels, is spending billions to remedy matters.

Bloomberg reports that Beijing is investing in new polysilicon production capacity. As a result, by the beginning of 2023, global capacity should be double what it is now. This, according to the agency’s Dan Murtaugh, should help bring down inflated prices for photovoltaic cells and make solar power more affordable.

According to data from BloombergNEF, by the end of this year, global polysilicon capacity could reach 1.3 tons, up from 785,000 tons at the end of 2021. This should grow further to 2.9 million tons when planned projects for producing the material from which solar cells are made launch.

According to Bloomberg, the polysilicon shortage will prove temporary, but a senior executive from one of the world’s largest solar panel producers, JinkoSolar, admitted that the industry had underestimated the problem.

In an interview with pv magazine, vice president Dany Qian said, “We expected that the polysilicon shortage would continue throughout 2021; however, we underestimated the seriousness of the situation. Added to this issue were rising logistics prices, constraints on containers due to the continued impact of Covid-19, and tightened control on the electricity supply of manufacturers in China, all of which contributed to supply chain turmoil and rising costs.”

Jinko Solar has its own plans for production ramp-ups this year, as do other producers, based on a recent report by the China Photovoltaic Industry Association. The CPIA said in December that new capacity additions were going to be lower than previously expected because of supply chain snags but will rebound this year, with a total of 75 GW in new capacity expected to come on stream, up from an estimated 45-55 GW for 2021.

By Irina Slav for Oilprice.com

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Irina Slav

Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry. More