Could a glass shortage delay global solar panel production?

 We like to keep an eye on a range of different industry factors that are impacting solar for better or worse, and one potentially worrying one that caught our eye recently is to do with the availability of glass for solar production in the coming months. 

Some of the world’s biggest solar power companies have stated that a shortage of glass is both increasing costs and delaying the speed of their production of new panels, which is hindering China’s - and possibly other nations - plans to accelerate their shift towards clean and renewable energy.

Price levels for the type of glass that coats solar panels have risen by a staggering 71% since July, with glass manufacturers struggling to produce it fast enough to keep more than a week’s worth of sales in inventory, according to Daiwa Capital Markets. 

The shortage comes as the solar industry turns toward bifacial panels, which increase both power output and glass requirements. Solar panel producers like Longi Green Energy Technology Co. have asked the government in China, home to most solar manufacturing, to address the situation by approving new factories. Otherwise price hikes risk making solar power too expensive and halting solar’s momentum.

Charles Jiang, general manager of the supply chain management center at Longi, the world’s biggest solar company, said: “If solar power generators see solar projects as uneconomical, they will delay investing in new projects and that will drag down solar demand. Solar power plant profits will drop below acceptable levels without government subsidies if glass makers go on to push up the costs.”

In 2018, due to over-capacity and pollution issues with the glass industry, China’s government banned companies from adding new production capacity. Longi and five other major solar companies reportedly met with government officials earlier this month and asked them to remove restrictions, at least for solar glass.

For panel makers, glass now accounts for about 20% of their total cost of production, up from around 10% previously, according to Charles Jiang. Because glass factories take quite a while to build, he also suggested that the solar industry could be 20% to 30% short of the glass it needs next year, with the market not being back in balance until 2022.

That’s not great to hear, but hopefully the industry won’t see too much of a setback given the hugley positive environmental and financial benefits it has brought over the past few years.