Chinese company accuses fellow manufacturers of artificially jacking up solar module prices

A Chinese solar manufacturing company has accused other Chinese manufacturers — some of whom export to India — of colluding together to restrict supply and artificially increasing prices of solar components

Indian renewable energy developers, who import more than 80% of their raw materials from China, claim that they are also subjected to the same collusion and thus are forced to pay much more than the market price.

“Indian solar power developers have been pointing to price escalation after signing of firm contract and cartelisation by Chinese module manufacturers for quite some time now,” said a spokesperson for Solar Power Developers Association (SPDA), an industry body representing some of India’s top renewable power producers.

Currently, prices for solar modules have risen to USD 22 cents, up from USD 18 cents in September 2020. Prices for future orders stand at USD 26 cents, which would mark a whopping 44% jump in costs over 9 months.

Since the beginning of 2021, the price of polysilicon — the main raw material used to make solar modules — has risen by 149%.

However, Chinese companies have denied any such claims, saying that the global rise in commodity prices has resulted in the increase of prices.

“These reports are completely unfounded. There has been a rise in global commodity prices for materials such as steel, copper, polysilicon, and even shipping. All of these have contributed to the price rise,” said a spokesperson from Longi Solar, one of India’s topmost suppliers for solar imports.

Other top players such as Jinko and Trina Solar remained unresponsive at the time of the article being published.

SPDA has called for the matter to be urgently looked into by Chinese authorities, as it continues to bear the brunt of high import prices and deadlines loom closer.

“The ‘sanctity of contracts” is seriously lacking and credibility of Chinese enterprises is becoming extremely low internationally. Govt. of China must investigate the matter fairly and stern action must be taken against guilty manufacturers,” SPDA’s spokesperson further added.

ET in its April 26 front-page report had outlined how the aforementioned companies had reneged on supply deals to Indian developers in a similar manner. Chinese companies had then responded similarly, pointing towards commodity prices and working with developers to reach a “win-win” situation for both parties involved.

The report

The production of a solar panel starts with multicrystalline silicon, better known as polysilicon, which then gets converted into ingots and wafers. These are then made into solar cells, and the cells are assembled into modules.

At present, India does not produce any ingots or wafers. Indian manufacturers import them to be made into cells, or import cells directly to be made into modules. Hence, most Indian developers choose to buy modules directly from Chinese suppliers.

Shanghai-based Aiko Solar is similar to Indian manufacturers, and only procures wafers to make into cells. They said that in addition to the 149% hike in polysilicon, wafer prices have also increased by 56% since the start of the year.

Agencies

Aiko Solar’s report, showing the unrelenting rise of polysilicon prices.

The report alleges that global demand stands at 180 GW, while China’s supply at present can go up to 190 GW.

“The coordinated behaviour of some companies to drive up prices and substantially increase prices not only affects the achievement of the mid-year photovoltaic installation target and the solemn promise of carbon peak and carbon neutrality made by General Xi to the world,” the report was quoted as saying. ET has seen a copy of the report, which was originally published in Mandarin.

Aiko, which has a capacity of 15 GW, said that their business activities took a hit as they had to renegotiate with the wafer suppliers prior to the delivery of the goods.

“The “spirit of contract” among enterprises is seriously lacking, and international counterparts are dissatisfied with the credit of Chinese enterprises in performing contracts,” Aiko said in its report.

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