Component prices follow metal futures prices. Yiwu small and medium photovoltaic companies: afraid to quote and accept orders.

“After the adjustment of the new energy export tax rebate policy on January 8, overseas customers, especially Middle Eastern clients, reduced their online inquiries significantly. They are very sensitive to prices, and as soon as prices increase, they stop purchasing,” said Xiao Wang (pseudonym), a sales representative who is stationed in Yiwu’s new energy market for Yiyuan Electric Technology Co., Ltd. (hereinafter referred to as Yiyuan Electric), on January 29.

Yiyuan Electric’s main products, inverter power supplies (INV) and energy storage lithium batteries, are not heavily affected by the policy. Dayu (pseudonym), sales manager of Suzhou Leneng Photovoltaic Power Co., Ltd. (hereinafter referred to as Leneng Photovoltaic), which mainly deals with photovoltaic modules, stated that the current increase in module prices has far exceeded the change in tax rates, mainly due to the surge in metal prices in auxiliary materials.

“Now, module prices follow metal futures prices. When silver prices rise in the morning, module prices increase in the afternoon. In the past, customers would place orders within a week after inquiry, but now, the price we set today might result in losses tomorrow. This has caused serious hesitation among customers,” said Dayu.

Starting from January 28, reporters from Daily Economic News visited the new energy market in the east of Yiwu International Trade City Zone 2. They learned that under the background of the export tax rebate policy adjustment and the sharp rise in prices of silver, copper, aluminum, and other metals, small and medium photovoltaic enterprises are caught in a dilemma of quoting and accepting orders. This dual impact of policy and market is forcing them to reevaluate their survival strategies.

“Unable to quote”

Xiao Wang said that currently, the company has no stockpiles. Customers’ orders can only be fulfilled around March or April, so the company has only increased prices by 5% to 10%. The impact is that overseas customers inquire much less.

“Currently, domestic supply is insufficient, and channel merchants are stockpiling, which has driven up module prices. Within a month, prices have risen from about 0.6 yuan/watt to 0.9 yuan/watt, an increase of nearly 50%,” said Peng Yaoping, head of Yiwu Yaocan Solar Technology Co., Ltd. Foreign customers cannot accept the current module prices, and negotiating a deal takes ten days or half a month. Often, a price is quoted yesterday, and today it has increased again. So now, the company doesn’t even know how to quote prices.

According to him, most customers in Yiwu’s new energy market come from Asian, African, and Latin American countries. They mainly want C-grade modules or downgraded A and B-grade modules, as high-quality modules are not in high demand for household use, not for power stations. “Yesterday, a customer wanted 20 MW of goods, insisting on a 0.01 yuan/watt discount, but I only make a profit of one or two cents per watt, which is not enough.”

The failure of the quoting mechanism directly leads to transaction breakdowns and credit losses. Peng Yaoping revealed that the phenomenon of “breaking contracts when prices fall” is becoming more serious in the photovoltaic industry. Additionally, because small and medium photovoltaic enterprises have very low profits and mainly rely on export rebates to survive, once the rebate is canceled, small factories producing low-end modules will definitely not be able to sustain.

Everyone generally believes that the recent export rush benefits are unrelated to small and medium enterprises. Dayu said that the current photovoltaic industry’s capacity has not been cleared, and some low-end capacity still receives local support, which will lead to unhealthy competition.

However, Peng Yaoping acknowledged the policy’s introduction, because China’s photovoltaic industry has matured, with the largest scale, shipment volume, and technology globally, and no longer needs subsidies.

Silver paste costs become the largest component of module costs

The current sharp fluctuations in module prices are rooted in changes in their cost structure.

Public data shows that since 2025, silver prices have surged over 200%, directly causing the proportion of silver paste costs to jump from 17% to 30%, replacing silicon materials as the largest cost component. Copper and aluminum prices have increased by 22.1% and 4%, respectively, indirectly transmitting cost pressures through auxiliary materials and energy storage demands.

Specifically, in 2025, the London spot silver price rose from $29.4 per ounce to $72.0 per ounce, and in January 2026, it increased by another 50.3%. The domestic silver (99.95%) monthly average price rose from about 7,600 yuan/kg at the beginning of 2025 to 18,400 yuan/kg at the end of the year, an increase of nearly 150% over the year. Silver prices accelerated in January this year, reaching a peak of 30,900 yuan/kg on January 29.

Regarding copper, in 2025, the average price of #1 electrolytic copper rose from 74,050 yuan/ton in January to 90,400 yuan/ton in December, a 22.1% increase for the year. In January this year, the average spot price of #1 copper along the Yangtze River remained high, between 101,000 and 105,000 yuan/ton.

For aluminum, in 2025, the monthly average spot price of A00 aluminum rose from 19,770 yuan/ton on January 1 to 21,430 yuan/ton in December, with a steady upward trend. In January this year, the average spot price of A00 aluminum reached 24,660 yuan/ton, up 10% month-on-month. Zheshang Securities research reports indicate that early 2026 aluminum prices are expected to rise by 17.5% compared to the 2025 average, entering a resource revaluation cycle.

In this regard, CITIC Construction Investment Securities analyzed that in TOPCon cells, silver paste consumption is about 9.0 milligrams per watt, with silver paste costs accounting for 50% to 62% of non-silicon costs, making it the largest single cost item in modules. Copper is mainly used for welding strips, cables, and other auxiliary materials, with a consumption of about 0.8 kg per kilowatt. A 10% increase in copper prices will raise module costs by 0.005 yuan/watt. Aluminum frames consume about 2.5 kg per kilowatt, and the increase in aluminum prices indirectly affects the costs of brackets and energy storage systems.

“China is the world’s largest user of silver, and photovoltaic is the industry that uses the most silver. Even with copper replacing silver technology, it may not prevent cost increases,” Peng Yaoping said. Modules made with pure silver have an actual power of 700 watts, while copper-replaced silver modules may only have 680 watts. After material costs decrease, the final unit cost might still increase.

Clearing photovoltaic inventory and increasing profits through battery trade

Faced with dual pressures from costs and policies, small and medium photovoltaic enterprises in Yiwu are seeking new ways out.

The most notable change is in inventory strategies. Contrary to previous years’ habit of stockpiling before the Spring Festival, Peng Yaoping admitted, “Now, I dare not do that. I’ve cleared everything.” Because at the current high price of about 0.9 yuan/watt, if prices fall back, the loss per module could reach 50 yuan, far exceeding the usual thin profit of 5 to 10 yuan.

Peng Yaoping revealed that recently, his company received a 40 MW module order from a large manufacturer and quickly sold nearly 20 MW of it. “Selling to those who took low-price orders and cannot produce at current costs. They are willing because using big manufacturer’s products as collateral can still earn some profit. I plan to sell everything before April 1 to avoid the risk of price fluctuations after the rebate is canceled.”

Meanwhile, a photovoltaic material supplier recently received 30 MW of modules at 0.8 yuan/watt, which is used by downstream customers to offset payments. The supplier wanted to sell to Peng Yaoping at this price, but he declined, worried that module prices might decline with falling metal futures prices after the New Year, and he didn’t want to take the risk.

In contrast to small and medium enterprises clearing inventory, some “gambling” traders are still active. Xiao Wang mentioned that some bold traders, during the market’s low in 2025, stocked goods worth several million yuan and now have sold them all for over ten million yuan profit. However, such “market myths” are rare in Yiwu’s new energy market.

In terms of cost reduction, new materials are an important focus. Dayu said that many module frames in his store now use fiberglass instead of aluminum. Although fiberglass has a short market history, low market share, and limited customer acceptance, it costs less than aluminum frames.

“I know some companies are considering replacing steel brackets with plastic-steel supports, but I’m not optimistic. Because Europe and the US have strict standards, whether plastic-steel supports can meet requirements within a 25-30 year warranty period is uncertain. If problems occur, we can’t afford the compensation,” Peng Yaoping said.

It is worth noting that, amid near-zero profits in the main photovoltaic module business, inverter and energy storage businesses have become important profit pillars for some traders.

According to Peng Yaoping, although the sales volume of energy storage batteries is not large, the profit margin is high. By operating through foreign trade companies, they don’t have to worry too much about domestic export rebate policy changes. Inverters are the main profit source, with hundreds of thousands of yuan worth of goods shipped monthly.

“However, in the long run, small and medium photovoltaic enterprises cannot survive solely by earning margins. If they only earn processing or OEM fees, they are actually losing money, just hovering around the break-even point. Enterprises still need to develop their own brands with core technologies,” Peng Yaoping concluded.

(Article source: Daily Economic News)