Published on Saturday 9 September 2023 | Article n°456
Advances in technology are removing the obstacles. The profitability of N-type silicon is now exceeding expectations. In mid-April, the price of N-type and P-type silicon stood at 83.2 RMB and 70.4 RMB/kg respectively.
According to EnergyTrend, the cost of producing N-type silicon is around 3 RMB/kg higher than that of P-type.
The net earnings of N-type silicon amount to 190 RMB/kg and P-type to 12.2 RMB/kg . Type N is 6 to 7 RMB/kg more expensive than type P, representing a gross margin difference of around 5 to 6%.
As production volumes increase, N-type silicon will become the quality benchmark.
Currently, revenues from N-type and P-type wafers are comparable, but a divergence is expected in the future.
A 182mm P-type 130µm wafer and a 150µm wafer were priced at 3.24 and 3.08 RMB per piece respectively. According to EnergyTrend, the current production cost of an N-type wafer exceeds that of a P-type wafer by 0.1 to 0.2 RMB per piece. When the improved power per wafer is taken into account, the cost per watt for both types of wafer is almost equivalent. The net gains per watt for the N and P type units are between 0.05 and 0.06 RMB per watt. In the future, the profitability of N-type wafers should improve.
TOPCon and PERC cells cost 0.80 and 0.75 RMB per watt respectively. The price differential between N-type and P-type cells has narrowed recently. EnergyTrend estimates that the production cost of TOPCon cells exceeds that of PERC cells by around RMB 0.03 to 0.05 per watt. Taking into account the lower cost of 0.01 RMB per watt of TOPCon cells, the overall cost differential between TOPCon and PERC cells is expected to be between 0.02 and 0.04 RMB per watt. The current net gains per watt for TOPCon and PERC cells are 0.13 and 0.12 RMB respectively. Looking ahead, the research firm predicts that as TOPCon's production capacity increases, PERC's market share will decline.
Last week, the price differential between N-type and P-type cells narrowed. The production cost of TOPCon cells exceeds that of PERC cells by around 0.03 to 0.05 RMB per watt. Taking into account the lower cost of 0.01 RMB per watt of TOPCon cells, the overall cost difference between TOPCon and PERC cells is expected to be between 0.02 and 0.04 RMB per watt.
The profitability per watt of TOPCon and PERC cells is 0.13 and 0.12 RMB. Growth in N-type production will reduce the attractiveness of P-type. There could be a premium associated with N-type cells. By 2024, TOPCon cell profits will exceed PERC cell profits by around RMB 0.05 per watt.
The panels :
TOPCon and PERC panel tariffs in the domestic market this week were RMB1.37 and RMB1.28 per watt respectively, showing a relatively constant price differential.
With regard to costsTaking into account variations in ancillary materials such as film and solder tape, as well as the reduced cost per watt of ancillary materials due to the increased power of the panels, EnergyTrend estimates that non-silicon costs for TOPCon and PERC panels will be broadly comparable.
Taking into account the cost of silicon EnergyTrend estimates that the assembly costs of TOPCon and PERC are 1.00 RMB per watt and 0.96 RMB per watt respectively. Therefore, the assembly cost of TOPCon exceeds that of PERC by around RMB 0.04 per watt. In terms of profitability, the net gains per watt for integrated TOPCon and PERC panels are RMB 0.11 and RMB 0.08 respectively.
On the domestic market, these figures vary between 0.06 and 0.07 RMB per watt for TOPCon and between 0.04 and 0.05 RMB per watt for PERC.
On the European market, the net profitability per watt for TOPCon and PERC panels is RMB 0.16-0.17 per watt and RMB 0.13-0.14 per watt respectively. This analysis highlights an additional profit margin of around 0.03 yuan per year.
In the future, the profitability of N-type production is expected to increase in line with the advancement of N-type cells. As a result, an overcapacity scenario looms over the industry, setting the tone for the photovoltaic sector over the next few years. As technological developments continue, the quality of production capacity is about to diverge. Ultimately, high-efficiency, low-cost production capacity will play a central role in generating surplus earnings. This outlook fuels our optimism about the medium-term profitability of the sector's leading companies.
EnergyTrend of 21 August 2023