Distributed Projects Witness a "Rush for Installations"! Module Prices Surge Over 20% in Nearly a Month, Some Dealers Face "Cancel Orders" [Hot Topic]

SMM March 25 News: Recently, as distributed PV projects have been affected by the policy window period, a rush for installations has begun. Driven by the surging demand, the prices of distributed PV modules have continued to rise. As of March 25, the average spot price of Topcon modules-182mm (distributed) has increased to 0.773 yuan/W, up 0.128 yuan/W from the low of 0.645 yuan/W on February 14, a rise of 19.84%. The average spot price of Topcon modules-210mm has risen to 0.778 yuan/W, up 0.133 yuan/W from the low of 0.645 yuan/W on February 14, a rise of 20.62%. The average spot price of Topcon modules-210R is reported at 0.778 yuan/W, up 0.133 yuan/W from the low of 0.645 yuan/W on February 14, also a rise of 20.62%. Click to view SMM's spot price quotes for PV products. Regarding the reasons for the recent continuous rise in distributed module prices, SMM believes it is mainly driven by the rush for installations of commercial and industrial projects at the 430 and 531 periods. Downstream procurement is active, and the demand for distributed modules has surged, leading to tight module deliveries in the market. Specifically, the policies mentioned above were released in January this year. The "Measures for the Development and Construction of Distributed PV Power Generation" and the "Notice on Deepening the Market-oriented Reform of New Energy On-grid Tariffs to Promote the High-quality Development of New Energy" (referred to as Document No. 136) were issued. The former mentions that commercial and industrial distributed PV projects (with a capacity of less than 20MW) connected to the grid before April 30 can still enjoy full on-grid tariff subsidies. Projects connected after this date will need to adopt the "self-consumption, surplus electricity on-grid" model, significantly reducing the certainty of returns. The latter mentions that distributed PV projects connected to the grid after May 31 will need to enter the power market for trading, with electricity prices formed through bidding, and will no longer enjoy guaranteed purchase tariffs. This has led to a significant increase in the risk of project return fluctuations. Therefore, before these two deadlines, in pursuit of higher returns, domestic distributed PV projects have inevitably seen a "rush for installations," and the demand for distributed modules continues to climb. According to SMM, the operating rates of most module companies in March have been adjusted upward, with a MoM increase of about 35%. Affected by the rush for installations, distributed rush orders have increased, and it is expected that module manufacturers' production schedules will continue to grow in April. Under the influence of the hot demand for distributed orders, module shipment demand has also increased. According to SMM, the domestic module inventory of several top-tier module manufacturers has been rapidly decreasing recently. SMM will also release the monthly module inventory data for March, so stay tuned! The surge in module demand has driven up the prices of PV auxiliary materials, and rising costs have narrowed the profitability of previously low-priced module contracts. In the context of the surge in module demand, the prices of PV films and PV glass have also been pulled up. In terms of PV films, according to SMM's survey last week, film demand has surged, deliveries are tight, and film costs are under severe pressure. Driven by both demand and cost sides, SMM expects film prices to show an upward trend. According to SMM, the production schedule of PV-grade EVA in March increased by 13.7% MoM, and the production schedule of PV films increased by 28.5% MoM. In terms of inventory, there have been some transactions of PV-grade EVA recently. Due to the rush for installations and increased production, there is a significant increase in demand, and it is expected that film inventory will remain at a low level. As of March 25, the spot price of transparent PV EVA film-420g/m² is quoted at 5.54-5.67 yuan/m², with an average price of 5.61 yuan/m². In terms of PV glass: according to SMM's spot price quotes, PV glass prices have gradually risen since February 24. The expected increase in module production schedules on the demand side is the reason why PV glass spot prices were supported at that time. According to SMM's survey, the number of new glass kilns ignited in March has increased, and the subsequent supply-side increment is relatively obvious. On the demand side, module production schedules have been stable with some increases recently, and module production schedules in April will still rise significantly. As the raw material inventory previously hoarded by module companies is about to be consumed, the subsequent order volume for glass is expected to increase significantly. It is expected that under the condition of undersupply, the new order prices of PV glass in April may rise again. As of March 25, the spot price of 3.2mm single-layer coating is quoted at 22-23 yuan/m², with an average price of 22.5 yuan/m². In addition, some models of PV batteries have seen a catch-up increase. Top-tier battery manufacturers have raised the prices of Topcon183 and Topcon210 batteries from 0.30 yuan/W to 0.31 yuan/W, while the price of Topcon210R batteries remains stable at 0.34 yuan/W. According to SMM's survey, the production schedules of PV module manufacturers for April have been released one after another recently. Top-tier module manufacturers have increased production by 15-30%, and the demand for PV batteries continues to be positive. However, the production increase space of specialized battery manufacturers is limited, and the market is in a state of undersupply, with prices remaining firm. The rising prices in various cost-side segments mean that for module companies, under the current price standards, the profitability of previously signed low-price orders has significantly narrowed. At the same time, driven by the "bullish" sentiment on module prices, "order cancellations" have inevitably appeared in the market. According to Caixin News, it has learned from multiple dealers that even after they have paid the full amount in advance to module manufacturers, the manufacturers have failed to deliver according to the time and price agreed in the order contract, and even requested an increase in the contract unit price. The involved module manufacturers include multiple top-tier brands. According to SMM, the quoted price of distributed modules last week rose to around 0.8 yuan/W, but the transaction price followed up slowly. Currently, the price spread in the distributed module market is large. Overall, orders of 0.8 yuan/W or even higher mostly come from distributors. The high transaction price of distributed modules from top-tier manufacturers last week was around 0.78 yuan/W. Some module dealers said that modules priced at 0.72 yuan have already been sold out. To avoid further disputes and imbalances, orders below 0.7 yuan are no longer accepted, and even orders that have been paid in full may be required to increase the price. In the short term, the PV market may maintain a tight supply and demand situation. How will prices evolve in the future? Regarding the outlook for future module prices, SMM expects that the PV market will maintain a tight supply and demand situation in the short term, and module prices may continue to rise, but the increase may narrow. With the arrival of the rush for installations in April, market demand is expected to further increase. In the longer term, LONGi Green Energy once mentioned during an investor activity survey that affected by the domestic new energy power market entry policy, a certain rush for installations may occur in Q2 2025. Currently, the domestic distributed market has gradually started to grow, driving a moderate increase in distributed module prices. Other segments have also adjusted to varying degrees due to end-user demand. Regarding the future changes in industry chain prices, it is still necessary to pay attention to the changes in industry output and demand relationships. Wang Tieshan, Director of the Industrial Development and Investment Research Center at Xi'an Polytechnic University, said in an interview with Securities Daily that after the "rush for installations," the prices of the PV industry chain will pull back, but in the long term, the overall price of the PV industry chain will show a recovery and upward trend. In addition, he also said that for PV companies, especially top-tier companies, it is still necessary to continue to strengthen industry self-discipline and promote technological progress. According to Caixin News, a relevant person in charge of LONGi Green Energy also predicted that module prices may pull back in H2, especially under the new policy, related investments may be suspended or contracted, which will affect this year's distributed installations.