What’s wrong with the world, what’s wrong with us as human beings? It seems that one global emergency is not enough for us to deal with, we need two, no three crises at the same time! As if the impending climate crisis was not enough of a challenge, and not enough that the Covid-19 crisis still has us firmly in its grip - now, for weeks, a new global crisis in Ukraine has been affecting our everyday lives and the international markets. Meanwhile, it has become almost impossible to make even reasonably reliable forecasts on the future direction of PV panel and raw materials prices, availabilities and the viability of supply chains. Based on the information available, we can only speculate that supply chains will continue to deteriorate and that prices will therefore inevitably rise. Nonetheless, one thing is almost certain: our need for renewables is increasing, so that rather than declining, demand will continue to rise. Yet no one can say with certainty at the moment how well we will meet this rising demand in the future.
Due to the ongoing pandemic, and compounded by the Russian army's invasion of Ukraine, there is a shortage of up to 100,000 truck drivers in Europe, most of whom come from Eastern Europe. On top of this, diesel prices are currently exploding, meaning that added to the spiraling costs of marine shipping, overland haulage is now also becoming very expensive. The steadily rising transport and energy prices will continue to influence the costs of PV installations until at least the end of 2022. Moreover, polysilicon prices are also climbing again, which will have a further negative impact on the price of solar panels in the medium term. To make matters worse, infection rates in Asia are rising faster than ever before. In keeping with its zero-covid strategy, China is once again sealing off entire major cities and special economic zones and sending them into temporary lockdown. If the rumors of nationwide restrictions proves to be true, this will once again bring global supply flows for many technology products to a standstill.
If these gloomy forecasts are realized and the Ukraine conflict does not come to a swift end, we are heading for major bottlenecks not only in cells and modules, but also in inverters, storage systems and mounting systems. By the middle of the year at the latest, the relationship between supply and demand is likely to be the main factor influencing prices. Given the current uncertainties caused by the Covid-19 and Eastern European crises, overall forecasts can only be very vague. However, from where we stand now, it seems impossible that the situation will improve any time soon or that the price rise for nearly every component required for the construction of a PV system can be halted as a result.
How can we prepare for the anticipated market situation?
The supply situation has been quite good so far, at least for solar panels, but the year is still young, and spring is just around the corner. Since availability is likely to decline rapidly, all of the players would be well advised to stock up on the required material early on. The situation is already looking much more critical for some types of inverters and in the energy storage segment. Certain products and accessories are often only available with a four- to six-month lead time. In such cases installers have to consider whether they can switch to alternative products. We also need to change our thinking on common types and sizes of modules, as many manufacturers no longer offer the smaller, more manageable formats for reasons of economy. Anyone who has to complete older orders and has designed them with smaller-format modules will have major problems finding suitable products and should therefore consider whether a complete redesign with currently available formats and modified electrical values might not be the more sensible alternative. It should be noted, however, that even many standard products may be subject to significant delivery delays over the coming weeks and months.
The fact is, three crises are definitely too many at once. It' s hard to envy the politicians in charge these days. With scarcely enough time to deal with the solution to a single problem, two new seemingly intractable crises have emerged. And yet, an urgent appeal has gone out to the foreign and health policy makers: do the job you've been entrusted with and ensure that we can lead a halfway normal life again without wars and pandemics. We now have to finally focus on tackling the even more menacing crisis of accelerating climate change. As talk show host Markus Lanz and philosopher Richard David Precht aptly noted in their podcast, which is well worth listening to, our children must think we are completely incompetent and mentally deficient for letting it get this far in the first place. Even more embarrassing is that we are still squabbling amongst ourselves instead of recognizing that we are all in the same boat and can only slow down climate change by pooling our efforts.
Overview of price points broken down by technology in March 2022 including changes over the previous month (as of 15 March 2022):
