Interesting times in solar power at the moment and it all stems from the calamities that are happening in China.
As everyone would be aware Australia has the cheapest prices per watt installed for solar panels in the world. This has been largely driven by the rise of China as the most dominant force in solar manufacturing. The Chinese solar manufacturers have been subsidised quite heavily over the last 12 years by the Chinese government to be able to make solar panels in such volume and at a lower price point than anyone else.To such an extent that the Chinese have largely driven every other countries solar manufacturing industries into the ground. They just couldn’t compete.
Germany was once a solar panel manufacturing power house. Leaders in research and development and with dozens of manufacturing facilities. They’re all largely gone now or bought out by Chinese manufacturers so they can assemble their panels in that country so they can access the EU solar subsidy programs.
Australia is another country that were once global leaders in solar panel production but the Chinese giant squashed that as well but it has to be remembered that it was mostly Australian R&D that provided China the means to achieve world domination in solar manufacture.
The clear majority of all solar panels installed in Australia are manufactured in China. That’s not necessarily a bad thing as some of the best products in the world come out of China but unfortunately so do most of the worst.
There is now a change in the air.
China has a coal shortage. They have announced their commitment to decarbonise their country’s economy. Freight costs are spiralling out of control.
Those are the 3 reasons we are seeing solar panel prices rising through the roof and no end in sight to where these rises will top out.
China put a ban on Australian coal due to the current diplomatic friction between our two countries and they’re running out of power. So much so that the factories that make solar power which normally run 24 hours per day are having their power shut off for 25% of the day to conserve energy.
I guess they could cave and say okay send us your coal again but they have recently signed up to stop releasing CO2 in 40 years. Not quick enough to really help the planet but given the majority of their energy comes from coal and the sheer size of their energy requirements its a monumental task.
With this in mind they have told their solar panel manufacturers to stop sending their panels overseas to export markets and redirect the bulk of their volume towards domestic products.
Lastly Covid 19 has seen a massive shortage of containers being available to shift all products around the globe. Freight pricing has got to the stage it is largely unknown what the freight pricing is going to be till it arrives at your door. Container availability has been auctioned off in some cases with those prepared to pay more getting preference and this has been driving the prices up.
So to round this off.
Only 75% available manufacturing capacity means less product availability. When demand out strips supply the price goes up.
What is being made is going to be directed into the Chinese domestic market which means less product availability for Australia and when demand outstrips supply the prices go up.
Lastly the freight costs have doubled, tripled and quadrupled which is a part of what makes up the retail price of all products so the price goes up.
Sounds terrible and for most of the market flogging the cheap junk it’s going to wipe them off the board all together as they wont have the ability to adapt to anything other than being the cheapest.
Is this going to affect DMS Energy prices?
The freight rises and some of the raw materials that go into solar panels have risen slightly so yes we are not immune from some of these inhalation practises.
DMS Energy rarely sells Chinese panels so this is going to insulate us from most of the Chinese shenanigans. We are partners directly with the two largest South Korean solar manufacturers. LG and Q.Cell and they are running at full steam. We have supply contracts in place and our prices will be holding steady for the foreseeable future.
DMS Energy has been very conscious of where we source our products from.
Chinese products from nearly every large Chinese manufacturer have had variable quality control issues and after seeing so many “cheap and cheerful” Chinese systems fall in a screaming heap only after a few years we made the decision to put quality over price and this invariably lead us away from Chinese products.
It looks like that decision has put us in the box seat for what is set to come over the next 6 months and beyond but it is called the Solar Coaster for a reason and you never know what’s going to happen next.
If you would like to find out more about DMS Energy’s awesome LG and Q.Cell solar panel products feel free to call 1300 502 599 or pop into our showroom at 56 Sheffield Rd Spreyton.
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