The worldâ€™s biggest solar power company says a shortage of glass is raising costs and delaying production of new panels, throwing a wrench into Chinaâ€™s plans to accelerate its shift to clean power.
Prices for glass that coats photovoltaic panels have risen 71% since July, and manufacturers are struggling to produce it fast enough to keep more than a weekâ€™s worth of sales in inventory, according to Daiwa Capital Markets. The shortage comes as the solar industry turns toward bifacial panels, which increase both power output and glass requirements.
Solar panel producers like Longi Green Energy Technology Co. have asked the government in China, home to most solar manufacturing, to address the situation by approving new factories. Otherwise price hikes risk making solar power too expensive and halting the industryâ€™s momentum.
In 2018, with the energy-intensive and polluting glass industry facing over-capacity issues, Chinaâ€™s government forbade companies from adding new production capacity. Longi and five other major solar companies on Tuesday met with government officials and appealed for them to remove the restrictions for solar glass.
Glass demand has also been rising within the solar industry because of the increasing prominence of bifacial panels, which coat both the top and bottom with glass, allowing for a slight uptick in power generation from sunlight reflected off the ground.
For panel makers, glass now accounts for about 20% of the total cost of production, up from about 10%, said Charles Jiang, general manager of the supply chain management center at Longi, the worldâ€™s biggest solar company by market capitalization.. Because glass factories take so long to build, the solar industry could be 20% to 30% short of the glass it needs next year, with the market not being back in balance until 2022, he said.