Global polysilicon capacities may nearly double by end of 2023 to 536 GW

In its Q2 2022 PV Supplier Market Intelligence Program Report (SMIP), solar and storage supply technical advisory Clean Energy Associates (CEA) said polysilicon production capacity may reach 295 GW by the end of 2022, and 536 GW year’s end 2023.

CEA said it expects this production capacity to far exceed solar installations next year. While this may suggest supply problems could begin to be alleviated, CEA said module capacity expansions are slowing. Many manufacturers are instead expanding cell production capacity, catering to the trend of n-type TOPCon and HJT manufacturing.

Ingot capacity grew almost 30 GW this quarter, most of which can be attributed to two facilities bringing 23 GW online.

Wafer capacity decreased slightly, said CEA, primarily due to a major provider retiring its multi-crystalline wafer capacity. The 17 suppliers covered in the report boosted cell capacity by 22% in Q2 2022, bringing 47 GW of capacity online, reaching a total of 262 GW.

Module production reached 324 GW in Q2. CEA forecasts this may expand 20% by the end of the year, reaching 400 GW.

Only seven suppliers covered by the CEA report are fully vertically integrated from ingot to module production, with most others operating at the cell and module link in the supply chain. “With growing merchant wafer options, there is little need for most suppliers to expand upstream,” said CEA.

The report said suppliers are working to optimize wafer sizes after the industry standardized 210 mm (G12) and 182 mm (M10) module dimensions. The “182 mm Plus” (182P) has increased wafer heights to further reduce “white space” caused by intercell gaps to achieve up to 5 W of additional output, said CEA. The “210 mm Reduced” (210R) reduced wafer widths for niche rooftop applications at the expense of power output. CEA said it expects new module sizes for the residential solar market to be introduced.

Many analysts have predicted China will break 100 GW of installations this year. CEA expects slightly lower installations in China during 2022 due to high module prices impacting utility-scale projects. It said many investment decisions have been deferred as projects could not meet their internal rate of return thresholds.

Most of the polysilicon supply chain originates in China. Outside of China, production capacities are 11 GW of ingot, 42 GW of cell, and 50 GW of module capacity. By end of 2023, these capacities are expected to expand to 23 GW, 73 GW, and 74 GW, respectively.

“Policy uncertainties continue to defer expansion plans of suppliers as they remain cautious due to lingering policy uncertainty in the United States surrounding the Uyghur Forced Labor Prevention Act and anticircumvention investigation,” said CEA in the report.