The Strategist

Analysts: Coronavirus rolls back green energy

05/26/2021 - 03:57

Production of solar panels for renewable energy has become unprofitable for the first time in a decade. Prices for polysilicon, a key raw material for green electricity sources, have skyrocketed amid the coronavirus pandemic, writes Bloomberg.

Oregon Department of Transportation via flickr
Oregon Department of Transportation via flickr
The cost of the key material for solar panels has quadrupled over the past year. Prices of solar modules, meanwhile, have increased by 18 percent since the beginning of 2021, compared with a 90 percent drop in price over the previous decade. Prices of polysilicon reached $25.88 per kilogram, up from $6.19 a year earlier, according to PV Insights, a global solar PV research company.

Polysilicon, which has been the main cause of the solar industry crisis, is one of the most common materials on Earth. It is most often found in beach sand. The price hike came as the solar industry struggled to meet the expected surge in panel demand and polysilicon producers could not keep up with the volume of raw materials. Analysts stress that 2021 could be the first year in 17 years when there is a pullback in the solar power industry worldwide.

The high prices for raw materials will linger until the end of 2022, according to experts at Roth Capital Partners, an American bank. This setback due to the rising cost of polysilicon threatens environmental projects to introduce solar power in India and the USA, as well as in other countries around the world that are switching to renewable energy sources to combat climate change. According to analysts at industry portal Solarzoom, rising solar panel prices could force energy giants in China to postpone some of their projects for a year.