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The largest solar manufacturer in the world has reduced the prices of a key component in solar installations by close to a third as production ramps up, threatening to sink weaker players.
The update comes after in December Longi slashed prices by more than 27%.
Per a Bloomberg report, Longi Green Energy Technology Co. cut the prices of silicon wafers by 31% following a steep drop in solar silicon prices. The drop itself was the result of new manufacturing capacity coming online.
These developments prompted the president of the company to warn that excess capacity would intensify competition beyond healthy levels and potentially drive smaller market participants off the market.
Interestingly enough, Longi itself is an active participant in the capacity expansion race. Earlier this year, the Chinese company announced plans to invest the equivalent of $8.7 billion to build a production capacity of 100 GW of solar wafers and 50 GW of solar cells annually.
These would effectively double Longi’s existing production capacity and make it the owner and operator of the largest solar power manufacturing base in the world, Bloomberg reported in January.
The cost reductions should be good news for solar developers around the world, as long as they are allowed by their governments to buy panels imported from China. In recent months, both the wind and solar power industries have been struggling with rising raw material costs, which have compromised their profitability.
Meanwhile, solar power continues to expand in the world’s top market for low-carbon energy. This year, China is set to add some 120-140 GW of new solar power capacity, which would be at least 40% more than it added in 2022, according to a Hong Kong consultancy.
In the first four months of the year alone, more than 48 GW of new solar power capacity were installed in the country.
By Charles Kennedy for Oilprice.com
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Charles is a writer for Oilprice.com