(Bloomberg) --
LONGi Green Energy Technology Co., the world's largest manufacturer of solar wafers, raised prices of the equipment for the third time in a month and said it would keep boosting them if polysilicon costs continue to soar.
The Xi'an-based company increased prices of two types of monocrystalline wafers by about 7% each, it said on its website. Prices for the two types of wafers have gained by 24% and 23% since July 19, when an explosion at a polysilicon factory in Xinjiang cut global supply and prices of the raw material jumped.
LONGi also for the first time explicitly tied its wafer prices to polysilicon, saying that everytime the raw material's cost rises or falls by 3 yuan (43 cents) a kilogram, its wafers would go up or down by 0.05 yuan per piece. Polysilicon has jumped by 56% since July 15, according to PVInsights.
The polysilicon surge has created a rare period of rising prices in the solar supply chain, which has seen costs tumble over the past decade on the back of technological improvements and manufacturing efficiency gains. Tongwei Co., the largest maker of solar cells, has raised prices by more than 21% since the explosion.
Polysilicon is the basic raw material for photovoltaic power. It's sliced into wafers, which are then wired into cells, which get assembled into the panels that produce clean electricity.
The price of panels, or modules, hasn't followed the rise in the rest of the chain, as producers are under pressure to maintain sales targets and long-term client relationships, according to Dennis Ip, an analyst at Daiwa Capital Securities. Module prices have risen just 2.5% since July 15, according to PVInsights.
Higher prices probably won't hold long, according to Xiaoting Wang, an BloombergNEF analyst in San Francisco. Any increase in module prices will make developers delay projects, helping to re-balance supply and demand.
©2020 Bloomberg L.P.
With assistance from Bloomberg
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