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Module price hike impacting middle-sized PV projects in South Korea
2021/11/5
The continuous rise in solar panel prices may affect PV projects of up to 1 MW tendered by the Korea Energy Agency and the domestic solar module industry may not be able to provide the necessary production capacity to respond to the recent supply bottleneck.
NOVEMBER 2, 2021 EMILIANO BELLINI
Module prices increased by up to 15% in the Korean market over the past six months.
The current global supply chain disruption in the PV industry is delaying or making unviable many solar projects across all markets. According to a recent report from Norwegian business intelligence firm Rystad Energy, increasing module and shipping costs may cause the delay or cancellation of as much as 56% of the solar generation capacity currently planned worldwide next year.
South Korea seems to be no exception, although it can count on a strong domestic solar panel industry that has recently increased its effort to enhance production capacities.
“Currently, there is no official index for solar panel prices in Korea,” Kyungrak Kwon, renewables program director at Seoul-based NGO Solutions for Our Climate, told pv magazine. “However, according to industry interviews, it is understood that the panel price has increased from 10% to 15%, or from KRW340 to KRW400 per Watt ($0.289-0.339), over the past six months.”
According to him, this price hike may affect, in particular, small and medium-sized solar energy projects that have participated in the country’s renewable energy certificate (REC) scheme within the last six months. “If a developer participates in the solar power bidding market organized by the Korea Energy Agency, the installation must be completed within six months,” he further explained. “If the module price increases within that period, losses will occur due to the confirmed bid price.”
In the latest tender held under the scheme by the agency, 2 GW of PV was allocated at a final average price of KRW136.128 per kWh ($0.115). “It is difficult to know the exact number of projects halted by the supply chain disruptions in Korea,” Kwon added. “However, currently, about 1-1.2 GW of solar power in Korea is supplied every quarter, and 80% of these projects are small and medium-sized, with less than 1 MW [generation capacity], so these projects are expected to be most affected.”
NOVEMBER 2, 2021 EMILIANO BELLINI
Module prices increased by up to 15% in the Korean market over the past six months.
The current global supply chain disruption in the PV industry is delaying or making unviable many solar projects across all markets. According to a recent report from Norwegian business intelligence firm Rystad Energy, increasing module and shipping costs may cause the delay or cancellation of as much as 56% of the solar generation capacity currently planned worldwide next year.
South Korea seems to be no exception, although it can count on a strong domestic solar panel industry that has recently increased its effort to enhance production capacities.
“Currently, there is no official index for solar panel prices in Korea,” Kyungrak Kwon, renewables program director at Seoul-based NGO Solutions for Our Climate, told pv magazine. “However, according to industry interviews, it is understood that the panel price has increased from 10% to 15%, or from KRW340 to KRW400 per Watt ($0.289-0.339), over the past six months.”
According to him, this price hike may affect, in particular, small and medium-sized solar energy projects that have participated in the country’s renewable energy certificate (REC) scheme within the last six months. “If a developer participates in the solar power bidding market organized by the Korea Energy Agency, the installation must be completed within six months,” he further explained. “If the module price increases within that period, losses will occur due to the confirmed bid price.”
In the latest tender held under the scheme by the agency, 2 GW of PV was allocated at a final average price of KRW136.128 per kWh ($0.115). “It is difficult to know the exact number of projects halted by the supply chain disruptions in Korea,” Kwon added. “However, currently, about 1-1.2 GW of solar power in Korea is supplied every quarter, and 80% of these projects are small and medium-sized, with less than 1 MW [generation capacity], so these projects are expected to be most affected.”
