Solar Panels Could Become More Expensive Due to Production Reduction in China

The prices of solar panels may rise due to the decision of the Chinese government that producers of raw materials for solar panels must significantly reduce production due to the acute power shortages in the country.

 

China is the world’s largest producer of these raw materials.

China has ordered silicon and polysilicon producers in southwestern Yunnan province to cut production by 90 percent and cut power consumption until December. This is because those companies use a lot of electricity. Due to the large-scale power shortages in China, several factories have been temporarily shut down.

The polysilicon price has already risen to its highest level since 2011, and further price increases are possible as supply is reduced due to production constraints, experts say. This product is used in almost all solar panels.

Earlier this year, the United States banned the import of Chinese raw materials for solar panels because production was allegedly made using forced labour by the Uyghur Muslim minority in the Xinjiang region.