Solar Buyers Win Big While Manufacturers Count Losses

Polysilicon used in the production of solar panels is still as cheap as chips and module prices remain incredibly low. That’s great news for solar buyers, not so good for manufacturers.

Solar polysilicon is a high purity form of silicon used as a base material in the manufacturing of solar cells. China is the dominant source, producing an estimated 83 percent share of the world’s polysilicon in 2022.

China’s Daqo, one of the world’s largest producers of solar polysilicon, must be longing for the comparatively heady days less than three years ago when the crucial material was fetching more than USD $36 a kilogram. But thanks to oversupply and the resulting cut-throat pricing competition, times are now very lean for the firm and its peers.

This week Daqo released its unaudited Q1 2025 results – and they aren’t pretty. Some highlights (if you can call them that):

• Production volume was 24,810 MT, compared to 34,236 MT in Q4 2024.
• Sales volume reached 28,008 MT in Q1 2025 compared to 42,191 MT in Q4 2024.
• Average total polysilicon production cost was USD $7.57/kg last quarter compared to $6.81/kg in Q4 2024.
• Average selling price was $4.37/kg in Q1 2025, compared to $4.62/kg in Q4 2024.

The company’s revenue in Q1 this year was $123.9 million, compared to $195.4 million in Q4 2024. In the same quarter last year, the firm racked up $415.3 million in revenue. At that point, Daqo had a cash balance of $2.7 billion, but by the end of Q1 2025, that had nosedived to $853 million.

CEO of Daqo New Energy, Xiang Xu, said the firm operated at approximately 33% reduced utilisation rate of its nameplate production capacity in Q1 in response to challenging market conditions and weak selling prices.

Mr. Xu remains optimistic about the future of the company – not that you’d expect him to be any other way.

“This year is challenging for China’s solar PV industry. At this point, we may have reached a cyclical bottom but have yet to see a clear turning point in the market,” he said. “As one of the world’s lowest-cost producers with the highest quality N-type product, a strong balance sheet and no financial debt, we believe we are well positioned to weather the current market downturn and emerge as one of the leaders in the industry to capture future growth.”

Looking ahead, Daqo expects 25,000 MT to 28,000 MT of polysilicon production during the current quarter and approximately 110,000 MT to 140,000 MT  for the full year of 2025.

Producer Loss Is Buyer Gain

There’s much more to a solar panel than just polysilicon and it’s not only polysilicon producers having a hard time.

Most Chinese companies involved with solar panel manufacturing are doing it tough due to oversupply and trade issues along with ruthless competition between producers – even given a floor limit set last year on module prices. Major manufacturers including Longi, JinkoSolar, Trina Solar and JA Solar have all reported significant losses for Q1.

For now, Australians buying solar panels are the big winners as solar power system prices for good quality installations remain comparatively low, thanks largely to dirt cheap PV panel prices. While major upward module price movements aren’t on the horizon, the best time to go solar is usually right now. Every day without a system means another day of racking up mains-supplied electricity costs higher than they would otherwise be.

But there are potential pitfalls; particularly with (too) cheap systems. Before racing out and signing on the dotted line for an installation, read SQ founder Finn’s comprehensive, easy-to-understand Solar 101 guide that will tell you everything you need to know about purchasing rooftop solar.