The year 2021 ends presenting the paradox of economic recovery and the disruption of global supply chains, still without a definition of the learning and actions necessary for the next cycles.
The impacts of the effects of the pandemic were felt at different levels in each region. Differences in contamination rates, restrictions and vaccination determined variations in the resumption of opening activities in each country, generating signs of increased demand and the resumption of production at different levels.
China was the first country to suffer the impacts of the pandemic, implementing restrictions that led to the closure of factories and limitations on economic activity. Likewise, it was one of the first countries to resume production activities, while the other continents were still facing the effects of the first and second cycles of contamination and their implications.
When factories in China tried to resume production, they encountered a scenario of disrupted production chains, resulting from increased global demands, restrictions on the partial resumption of manufacturing and the misalignment of component chains.
These chains were not prepared to supply the inputs and components necessary to manufacture finished products, in a volume that had not been planned.
A classic example of one of the main component chains that has broken is in the semiconductor industry, responsible for supplying integrated circuits (“chips”) to almost all segments of the consumer goods industry.
The demand for space on cargo ships, the unavailability of containers and restrictions on port activities in exporting and importing centers also worsened the recovery in international trade, generating additional costs and deadlines for goods manufactured in Asia to reach consumer markets.
With the increase in energy demands in the country and global costs, the Chinese government was forced to authorize the reopening of generation plants that use coal, which had been shut down to meet the carbon reduction targets with which the country had set itself. committed.
The coming months should determine the extent of these restrictions and other impacts, depending on the severity of the winter in the northern hemisphere from December onwards. If winter presents very low weather conditions and temperatures, the demand for energy for heating homes will remain high and industries will face greater restrictions on manufacturing activity.
The Chinese government's decision to limit energy use by industries could impact all segments dependent on components, semi-manufactured goods and finished products on a global scale. Productive activities that require high energy consumption may be the most compromised.
In addition, zero tolerance policies for signs of new outbreaks of Covid-19 contamination, with restrictions on activities in factories and ports, generate more uncertainty regarding the continued resumption of production capacity, signaling that there are not yet full conditions for stabilization in the short term.
As Chinese New Year will be at the beginning of February 2022, the possibility of a broader resumption of activities will occur before the end of winter, but the effects of impacts on supply chains should be felt until March 2022, when we will be able to assess the recovery conditions and other estimates for reestablishing production capacity in China.
The photovoltaic solar market in Brazil in 2022
Despite all the challenges, in 2021 the solar photovoltaic market in Brazil continued to grow above expectations and projections, with demands exceeding product availability.
The water crisis, insecurities in guaranteeing energy supply and increases in prices and tariff flags motivated consumers from all sectors to look for options in new generation sources, with the massive popularization of photovoltaic solar energy.
Expectations for the expansion of distributed micro and mini generation remain high. Distributed generation should exceed the accumulated power of 11 GW projected by EPE (Energy Research Company) for photovoltaic solar sources in 2022.
Although relevant, the main elements restricting this growth will not be associated with the prices of modules and components, freight costs, exchange rate volatility or political uncertainties in an election year.
In 2022, the biggest limitation to supporting the continuity and expansion of the use of photovoltaic solar sources will be the availability of products, the main challenge being to control imports and the supply of solar modules to the Brazilian market.
Instability in supply chains and their components is expected to persist during the first half of 2022, making it essential to monitor the entire production chain for photovoltaic solar modules.
If on the one hand we had an announcement of investment in increasing production capacity in China, the implementation of factories in other regions of the world such as Europe and the USA is being evaluated by several manufacturers, due to the current dependence of the solar market on suppliers from China and the southeast. Asian.
The diversification of regionalized production will only have a practical effect if all associated supply chains are also established outside China: cells, glass, encapsulants.
Production and inventory estimates for solar module inputs and components signaled accommodations and some price reductions this week, but still preliminary and without indicating a solid trend for the coming months.
In the last week, polysilicon prices remained stable and, despite demands, no increases in installed manufacturing capacity were announced, with almost full occupancy until the end of the year. Some wafer manufacturers announced price reductions after a month without changes, as a result of increased operational efficiency and greater factory productivity.
As a result, the market has monitored and promoted adjustments in the FOB prices of modules, still with reservations and in the expectation of defining medium-term trends.
Standardization in module sizes can contribute to simplification and cost reduction in the wafer and cell manufacturing chains, making it necessary for the industry to adopt standards in the manufacturing stages of these components.
In the local Chinese market, demand for polycrystalline and monocrystalline cells with dimensions up to 166 mm (M3 and M6) shows signs of slowing down, signaling opportunities for import markets. The demand for 200 mm monocrystalline cells (M10) remains high, with full use of manufacturers' installed capacity and a tendency towards maintenance and/or price increases.
Finally, in 2022 we should observe the popularization of new solar module technologies, with growth in the application of TopCon Type N and HJT (Heterojunction) cells, with greater efficiency and less degradation effect.
The prices of new technologies are not yet comparable to the levels of mono and mono PERC cells, but the evolution of manufacturing processes and the increase in production scale should reduce the differences in the second half of the year, making these technologies relevant options for supply in 2022.
The opinions and information presented are those of the author and do not necessarily reflect the opinion of the Canal Solar.
