Chinese solar glass makers up capacity as prices rise

Chinese solar glass producers are accelerating their capacity expansion plans in response to a supply shortage that drove up prices in the second half of 2020.

Demand for solar photovoltaic (PV) panels dropped in the first half of last year during coronavirus-related lockdowns. But a rise in solar installation projects and falling component costs prompted a rapid rebound in demand in the second half — outpacing supply of materials including polysilicon and solar glass. That disrupted production at some solar module manufacturers, which have moved to secure supplies with long-term contracts.

The average market price of mainstream 3.2mm solar glass in China declined by around 17pc in the second quarter of 2020 from the beginning of the year, according to Chinese solar glass producer Xinyi. Prices remained relatively low until July as suppliers sold off inventory. The rise in domestic and overseas demand lifted the price by more than 70pc. The annual average market price in 2020 was around 12pc higher than in 2019.

Solar glass producers have brought forward plans to build additional capacity, but given that it typically takes up to two years to complete construction of a new facility, they expect supply to remain tight in the short term, lifting prices further.

Global solar PV installations exceeded 100GW last year, led by China, where more than three quarters of its 48.2GW of new capacity was added in the second half. Capacity installations are forecast to rise further in 2021, exerting more pressure on the supply chain.

A growing adoption of double glass and bifacial panels and larger format solar modules is also boosting the amount of glass used for each panel, implying increased use of indium tin oxide coatings.

In response, Xinyi will advance the start of four new production lines in Anhui province, each with a melting capacity of 1,000 t/d.

The firm has also started planning and construction work for 16 new production lines with a melting capacity of 1,000 t/d each in Jiangsu province and Anhui. It expects to complete four of the lines in Jiangsu in 2022. The new capacity further expands on the 2,000 t/d the company added in Guangxi in June and August 2020 that brought its output to 9,800 t/d.

To mitigate the impact of rising raw material costs, Xinyi started production during the third quarter at its first low-iron silica sand mine near its facility in Guangxi. The company could further increase its capacity, as it will adjust the expansion plan to adapt to changing market conditions.

China's industry ministry published a draft in December 2020 indicating plans to ease restrictions on investments in new solar glass production capacity. Under the changes, manufacturers would not have to submit capacity replacement plans to add new capacity but would need to obtain technology, energy consumption and environmental accreditation by qualified industrial and professional agencies. That would remove a potential PV supply chain bottleneck and would facilitate innovation and increased efficiency in the solar glass sector, Xinyi said.

New production

Chinese lighting, display and glass producer Irico Group New Energy on 1 March commenced a three-phase project to construct 10 PV glass furnaces and production lines. The company will build three lines in the first phase, which is scheduled for completion in the first half of 2022.

China-based producer Flat Glass is issuing new shares to raise financing for its PV glass capacity expansion. The company has invested 1.75bn yuan ($270.5mn) in the first phase of a production facility in Anhui Province with a capacity of 750,000 t/yr. The project has two raw glass production lines with a melting capacity of 1,200 t/d. The first phase started to ramp up at the start of the year and in January it raised additional funds for a second 750,000 t/yr phase that is expected to commence output in the second half of this year.

The company also expects to gradually start production in the second half at a PV backplane glass project with an annual capacity of 42mn m². As PV manufacturers accelerate the development of large modules, Flat Glass will further increase its investment in the production of large and ultra-thin PV glass as it looks to expand its market share.

By Nicole Willing