Solar panel prices, which have nearly halved over the past year, are expected to remain stable at current levels for up to two years, according to Davis Chong, President of the Malaysian Photovoltaic Industry Association. Chong stated that manufacturers in Malaysia, the world's third-largest producer of solar photovoltaic modules, are slowing down expansion plans to adjust for lower demand and prices.
Chong explained, “The upstream supply is roughly double the downstream demand. It will take about one to two years to adjust and balance the supply and demand.” He also highlighted that the lower prices present an opportunity to accelerate the installation of solar projects globally, emphasizing the importance of favorable and transparent policies to capitalize on this trend.
The cost of producing solar panels in China, which accounts for about 80% of global consumption, has dropped by 42% in the last year, giving Chinese manufacturers a significant advantage over competitors in the United States and Europe. Despite this, Chong believes that U.S. President Joe Biden's move to offer tax credits for facilities using American equipment to accelerate the decarbonization of the U.S. power sector will not challenge China's dominance in solar manufacturing.
Chong noted, “This supply chain will still follow the principle of supply demand and economies of scale in the long term,” adding that China will continue to dominate the global solar PV supply. Solarvest, a Malaysian solar company, is planning to raise S$50 million to S$100 million in equity through its Singaporean entity to increase its solar capacity to 2 GW in 2025, up from 1 GW currently.
“This is set to complete within this year and will serve as the first tranche of money to be deployed into projects in the Asia Pacific,” Chong said.
