Solarletter #16_EN - Low electricity prices: a brake on photovoltaics
Also: Top 34 of the largest EPC contractors, Race to the bottom, Prices keep dropping, and Trina pushes module power again
Please note that text below has been translated from the spanish version by using AI
Hello everyone and welcome back to Solarletter. My name is Imanol Matanza, and I aim to share with you the latest news, technological advancements, and trends in the field of photovoltaic energy. Through Solarletter, I hope to provide you with valuable information, market analysis, state-of-the-art updates, and practical tips that will help you stay informed about the latest developments in the photovoltaic industry.
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Alright, let us go with a couple of interesting pieces of news!
Low electricity prices: a brake on photovoltaics
Interesting article in Energía estratégica, where Milena Giorgi interviews Carmen Izquierdo, CEO of nTeaser. In it, they mention that the Spanish electricity market has experienced nearly three months with prices reaching €0 per kWh for more than six hours.
With a strong renewable generation from wind and photovoltaic sources, a slight decrease in demand, and hydro reservoir levels two points above historical levels, analysts believe these trends will continue until the end of the year. Furthermore, everything indicates that the trend will worsen in the coming years.
"The drop in the pool price in recent months has generated a lot of uncertainty, and we have seen quite a few changes in renewable investment dynamics."
Additionally, she points out that there is more interest and better margins in the sale of operational plants, as EPC prices continue to decline. On the other hand, the large number of projects ready with construction permits makes EPCs the bottleneck at the moment. This year, 23 parks of over 50 MW are expected, with a total capacity of 2.2 GW, of which approximately 2 GW are photovoltaic.
This scenario creates uncertainty about the profitability of future developments, which is why many are starting to opt for (or at least consider) the implementation of batteries. In this way, they aim to protect themselves and cover their backs against future curtailments and low electricity prices during midday.
Certainly, a good example of what could happen in Spain can be found in California. On April 16th, two significant milestones were reached:
Batteries became the largest source of supply on the grid.
Batteries exceeded 6 GW of power for the first time.
nTeaser believes that this situation will result in a cleaning and purification of the sector. The sale of projects in early stages of development is now a thing of the past.
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Top 34 of the largest EPC contractors
Once again, we return with a ranking of the largest EPCs worldwide. Wiki-solar shares their list for Q1-2024 and compares it to January 1, 2023. For this, they analyze the following two data points, both in total cumulative and for the year 2023:
Number of grid-connected projects.
AC power at the connection point.
Analyzing the table in detail, one can observe how the top is almost exclusively dominated by companies from five countries: the United States, France, India, Spain, and Germany.
As an interesting fact, comparing the number of projects with the connected power reveals a distinct dynamic between them. While many companies are active in different markets, you can see the different strategies at play. Indian companies connect fewer parks but with greater power, while German and French companies connect many parks but of smaller sizes.
In Solarletter #9, we showed the same top EPCs from Wiki-Solar, but with data from Q3-2023. From this, another interesting point emerges. If in November 2023, the top 34 EPCs in the world accounted for approximately 18% of the market, they now only represent around 16%. This implies that competition is increasing, with more players entering the game.
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Race to the bottom, prices keep dropping
Despite seeming incredible, yes, polysilicon prices continue to decline. It appears that the bottom is even deeper than some had forecasted, as prices have reached as low as 40 CNY/kg (SolarBe Global).
Although we discussed this in Solarletter #15, compared to the last update on April 10th, the price difference between n-type and p-type has decreased to 5.4 CNY/kg.
Sources from SolarBe confess that the increase in orders from manufacturers causes prices to fluctuate from week to week. Additionally, polysilicon producers continue to increase their manufacturing capacities. There are polysilicon stocks for 22 days, and manufacturers do not plan to cut their production.
In the short term, the polysilicon segment faces a significant surplus situation, and it is unlikely that prices will bottom out until there is a substantial reduction in production.
It is fascinating for EPCs to see how module prices decrease as well. Just look at the latest news about Solaria's purchase agreement, where they claim to have secured deals 71% cheaper compared to those in 2022! We are talking about a price of only 9.11 c€/Wp... With this, they secure the shipment of 435 MW, which they will largely use in their new 700 MW project in Garoña.
Will module prices bottom out? It remains to be seen.
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Trina pushes module power again
Trina has just set a new module power record, making it 26 times now. We are back with news about the manufacturer market (as usual in the fourth news of previous editions). Trina has announced its new module with TOPCon technology and n-type cells, boasting a total power of 740.6 W, tested and certified by the accredited TÜV SÜD laboratory in Germany.
In Solarletter #7, we mentioned how Trina aimed to lead the production of modules exceeding 700 W, and in Solarletter #12, how it joined forces with other manufacturers to standardize 210 mm wafers and module dimensions, measuring 2,384 mm in length and 1,303 mm in width.
"Every advancement is the result of our relentless pursuit of technological innovation and excellence. This sustained leadership in i-TOPCon technology underscores Trina Solar's competitiveness and drive to lead the era of 700W+ and the 210 mm advanced n-type technology platform. Fostering and protecting innovation also serves as a growth catalyst for the industry,"
said Gao Jifan, President and CEO of Trina Solar and Director of the Key State Laboratory of Photovoltaic Science and Technology in Changzhou.
Gone are the days of 300 W modules that could be carried by one person. Now, with weights nearing 40 kg, even two-person transport becomes challenging.
Will we ever reach 1 kWp modules? Will cranes be necessary to handle them? Only time will tell! 😄
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Edition´s microtip curiosity
Interesting post by Angelica Oung discussing how a large-scale photovoltaic project in an arid area has managed to facilitate the growth of grass. Even the goats have been encouraged to graze in the project!
The photo belongs to the "Gonghe Talatan Solar Park" in Qinghai Province, China. This project is the second-largest in the world, with a capacity of 2.2 GW.
Angelica translates a news story from a Chinese media outlet, stating that the land was 98.5% desert. After its construction in 2012, it was decided to plant grass to prevent wind from lifting sand/dirt and causing damage to or depositing it on the panels.
However, after several years, they were pleasantly surprised to find that the grass had grown so much. Vegetation now covers 80% of the park, and, of course, they ended up needing the best lawnmower on the market, sheep, and goats! Around 20,000 of them... which is quite a lot...
In Solarletter #13, we already discussed how large-scale projects could have positive effects on the weather conditions of the surrounding area. Indeed, another argument in favor of photovoltaics, and how mega-projects in remote areas can give new uses to those regions.
I just hope they have the cables well protected because goats tend to like chewing on DC cables too much, I would say...
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