Solar Panel Supply Chain Shortages Plaguing the Industry

As restrictions ease across Australia in time for summer, the rest of the world isn’t faring so well as the knock-on effects from the COVID crisis start to impact supply chains.

The perfect storm is looming over Australia’s solar market in the coming months as a number of factors converge, which experts worry could result in skyrocketing prices for solar installations.

Global price increases are being driven by a shortage of silicon, glass, silver, and other raw materials. Add on top of that increased shipping prices and crippling power shortages across China’s industrial belt and it becomes apparent that solar system prices are about to explode here in Australia.

One concerning price increase is polysilicon, the material used to make solar cells, with the price jumping from 20c to 28c.

As RenewEconomy has reported, manufacturing costs of solar panels have surged from $US0.20 per watt peak (Wp) in 2020 to $US0.28 per Wp in the second half of 2021 – the highest price since 2017:

The other main concern is the price of shipping. The price increases now mean that shipping accounts for nearly 10% of the price of a solar panel, up from just 3% in 2019:

Power Cuts In China

The power cuts in Chain have been well documented, and they are having a serious impact on the production of solar panels. The New York Times reports that: “High demand and soaring energy prices have forced some factories to shut down, adding further problems for already snarled global supply chains.”

Stock Shortages Have Already Begun

Stock shortages are now a reality for Australian solar installers relying on stock flowing from China. Allowing China to dominate the global manufacturing of solar panels may now come back to bite the global solar industry, especially installers that sell the cheaper panels at ‘rock bottom prices’.

There is a chance the entire bottom end of the solar industry will be unable to get their hands on cheap stock for months, starting this summer. This is expected to cause a wave of installers going into receivership, leaving their customers without warranty support, something we refer to as solar orphans.

Installers across Australia have been racing to get their hands on whatever stock is available, which at this stage looks to be coming from the top handful of manufacturers that aren’t based in China, mainly LG Solar, and REC, along with a few others.

Don’t Panic…

Solaray and other leading solar installers have long-established relationships with the larger manufacturers and so we have access to larger amounts of stock at stable prices – and get priority for delivery when stock does land on Australian soil. However the global supply chain issues continue to affect the entire industry, with even top installers experiencing delays with receiving orders of both panels and solar batteries.

Solaray customers can breathe easy – we guarantee the price of your system when you place an order, so once you have paid your deposit there will be no surprising price rises or additional fees even if there are any delays with your order as a result of the global supply chain crisis.

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