PV prices high today, higher tomorrow – pv magazine International

There is no end in sight to the surge in prices for PV modules, leaving stakeholders to either postpone the construction of their PV projects indefinitely or – like the customers of the aforementioned vegetable hawker – secure the coveted commodity sooner rather than later and avoid having to dig even deeper into their pockets. Price differences for comparable module brands and technologies are actually a function of whether they still have to be shipped from Asia. But what has gone awry here, making longer-term supply contracts no longer sensible, and planning security a thing of the past?

It all started when the international movement of goods met the Covid-19 pandemic. First, individual plants came to a standstill, preventing urgently needed goods from entering circulation. Container ships could not be utilized to capacity, and deliveries were delayed. By the time production resumed, at least in China, the virus had already reached the shipment hubs. Freight forwarders, ports and customs authorities could only operate at a much-diminished capacity, if at all. Employees were absent due to illness, seamen and dockworkers often had to go into quarantine, and the movement of goods could not flow freely. There were times when important overseas ports had to be closed and cordoned off for days on end. Due to these uncertainties, existing capacities at the shipping companies were reduced so as not to leave shippers with unused capacities and spiraling costs.

Demand comeback

Once uncertainty about the course of the pandemic had somewhat subsided in early 2021, the chaos in the global flow of goods really kicked in. As a result of lockdowns and working from home, there was a growing need to make home improvements and pursue a more sustainable lifestyle. After a lull of several months, consumption suddenly went crazy, at least in industrialized countries, and the solar industry was no exception.

Many stakeholders in Germany report a lucrative first half of the year. But shipping companies and freight forwarders had scaled back their capacities and were not prepared for a rapid increase in the volume of goods. In addition, many service providers and government agencies were still not operating at normal capacity. Within a short period, demand for transport far outstripped supply. Cargo ships were backed up outside ports, and as a result, turnaround times in the international flow of goods also increased by 20% to 30% compared to pre-pandemic levels.

The bottom line is that too many goods are waiting on too few ships worldwide, and logistics chains are not functioning as they should. As a result, freight rates have exploded since last fall. Whereas a container of sea freight from China to Rotterdam cost roughly $1,500 to $2,000 before the pandemic, prices have now skyrocketed to $15,000 to $18,000. In terms of module capacity, the freight component has increased tenfold from the previous level of around €0.004-€0.006/W, up to €0.05-€0.06/W….