2020: The Year of Big Modules and PV Supply Constraints
By George Touloupas
The world’s solar and energy storage markets and supply chains are constantly evolving. CEA’s solar and storage experts offer valuable, on-the-ground industry data about technology and policy trends from manufacturers. We collect, digest, and publish the most important solar supply insights quarterly in our Supplier Market Intelligence Program (SMIP). Below are some highlights from one of our recent SMIP reports.
High Power Modules Will Eventually Lower LCOE, But There Are Risks
Almost all leading solar module suppliers have now unveiled PV modules above 500 W. These high-power modules use a combination of technology upgrades at the ingot, wafer, cell, and module level, striving to achieve higher powers, and in some cases higher efficiencies.
Specifically, manufacturers are achieving these wattage gains through half-cut or even triple cut cells, multi busbar ribbons, dense cell-to-cell interconnection, bigger wafers, novel module layouts, high-efficiency n-type cells, and other innovations.
This new generation of high-power modules can lower the levelized cost of energy (LCOE) in several ways, but that assumes that these new products and technologies remain consistently reliable. It also assumes that the entire solar supply chain can efficiently and cost-effectively adjust to compensate for these larger and more powerful formats.
Areas we might expect to see these new module approaches reduce LCOE include:
CAPEX: Balance of System (BOS) goes down, in most cases; Fewer modules means less area (when module area efficiency is higher too), lower racking costs, less labor; Price in $ / watt goes down as production becomes more efficient (assumed no premium pricing).
Financing (for innovations that include changing of silicon doping): IE’s can accept lower LID, improving finance.
Revenue: High quality advanced products bring higher yield and revenue.
Areas that will need attention to ensure costs can be lowered include:
Reliability: Technology selection and vetting needed to avoid pitfalls; Focused Quality Assurance needed to ensure good product quality, especially for new technologies.
Maintenance: New technologies pose risks of higher product failures and higher O&M cost; Tighter due diligence screens for such risks; Regular inspections prevent issues.
Risks of Big Modules
Increased Mechanical Stresses
Larger modules and cells can lead to increased mechanical stresses. The increased size and weight can reduce load-bearing capacity, potentially having a higher susceptibility to mechanical failures. Module suppliers are adopting reinforced frames, which can come at the cost of increased module weight. However, they’re also experimenting with newer frame designs to strike a balance between cost and durability.
Increased Transportation Costs
Beyond weight changes, some wider module formats may require special high cube (HQ) containers for shipping, potentially increasing transportation costs.
Microcracks
To make the modules more powerful and increase the area efficiency, suppliers are introducing new technologies to interconnect cells more densely and increase the area efficiency of the module. In general, all these technologies are more complex than the conventional ones and require better production control and thorough product testing.
Cell microcracks due to imprecisions during the more delicate interconnection process are one of the most common expected risks.
Solar Module Supply Chain Issues That Could Affect Large Module Pricing
New supply constraints for encapsulant, glass, and polysilicon were revealed in the third quarter of 2020 that introduced manufacturing bottlenecks and affected near-term pricing for some.
Encapsulant
Most ethylene vinyl acetate (EVA), polyolefin encapsulant, and backsheet production tools can accommodate up to 1050 mm widths, but this is not wide enough for new 500 W+ products.
New capacities that can support wider modules are quickly being built, with new facilities likely to start coming online and ramping up in Q2 of 2021. Material inputs for EVA and polyolefin encapsulant are also undergoing a temporary supply squeeze as the upstream component industry is reacting slowly to downstream module capacity expansions.
Glass
While major glass suppliers can support the production of the new crop of larger modules, they have mixed plans when it comes to capacity development. New glass capacity is planned to be compatible with wider module formats, but PV module manufacturers are concerned about encountering limited supply of glass as module capacities expand rapidly in China.
In addition, glass factories are CAPEX intensive and can be difficult to site and obtain permits as they are energy intensive and need good infrastructure for raw material supply and finished glass transportation; meaningful new supply is slated to materialize in late 2021.
Polysilicon
In the second half of 2020 several accidents and natural disasters took some polysilicon factories offline, creating a temporary supply shortage that caused a spike in pricing. The sudden price change in polysilicon refocused attention on raw material suppliers and increased awareness of supply issues in the industry.
The supply shocks revealed a narrowing of polysilicon production while annual solar demand continued to increase. The result has been a protracted period of high polysilicon pricing which is still in the process of returning to pre-COVID levels.
The other potential polysilicon supply constraint is the United States’ proposed Uyghur Forced Labor Prevention Act which impacts all products and materials produced in Xinjiang, China. The legislation was overwhelmingly passed by the House of Representatives, and it declares that products from Xinjiang will be assumed to have been made with forced labor unless the importer can prove otherwise. More than one half of all polysilicon used to make wafers (and subsequently solar cells) comes from this region.
While there is enough non-Xinjiang polysilicon to support the United States solar industry, PV module importers might have to prove that the product never “touched” Xinjiang, or that the Xinjiang factory did not use forced labor. CEA is prepared to audit module supply chains and validate whether the polysilicon used in PV module production procured outside of Xinjiang.
2021 Supply Constraint Outlook
As of this writing, CEA expects that encapsulant and some other module components with slightly elevated prices like module frames will ease some time by the end of Q2 2021. Supply constraints for harder to produce inputs like glass and polysilicon, may not alleviate until closer to the end of the 2021.
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With the solar and energy storage markets and supply chains constantly evolving, it’s important to stay ahead of the trends.
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George Touloupas is the Director of Technology and Quality at Clean Energy Associates. At CEA he leads projects centered on developing CEA’s internal quality standards, researching new production technologies, and developing new services. George has an extensive background in PV manufacturing, as well as downstream experience, working among others, prior to joining CEA, as the Chief Operating & Technical Officer at Philadelphia Solar in Jordan and Technical & Operations Director at Recom.