The price of key solar panel components in China surged the most in two years, driven by production cuts and a broader government push to address industry overcapacity.
Wafer prices rose 22% in the week through Thursday, the biggest gain since February 2023, according to data from the China Silicon Industry Association. This is a turnaround for wafer prices, which had been declining for months.
“Supply shrank as wafer producers implemented production cuts and load reduction plans this month,” the association said in its weekly note. It added that operation rates for the sector fell slightly this week, with the rate of two leading producers at 40% to 50%.
China’s solar industry has grappled with overcapacity and fierce competition, but a slew of measures to reduce output since late last year, including setting a price floor, has so far failed to halt losses.
However, the latest effort appears to be working, with polysilicon prices also surging over the last few weeks.
Wafer producers have reached a preliminary consensus and aimed to raise product prices further, according to the association. N-type G12 wafers will be priced at 1.93 yuan per slice, a 43% increase from this week’s level.
Any further hikes will depend on whether the downstream solar cell and module producers can accept them, said the association.
