Shares in solar companies declined more than 10% so far this year, after jumping 250% in 2020 as the cost of solar energy is seen stabilizing or even increasing, after falling by 80% over the past decade due to soaring prices of raw materials such as steel, polysilicon and freight costs and despite governments pledge to focus on a green recovery from the pandemic. Price of US hot-dipped galvanized steel coils more than doubled since early 2020 to record levels, prices for monocrystalline silicon cells increased by a quarter in the past year; and freight rates in China also jumped this year. Weighing on the solar supply chain, about 40% of Chinese production of polysilicon comes from the Xinjiang region, which is linked to the use of forced labour, and both the US and Europe issued a ban on that polysilicon. Despite all the above, the cost of solar installations is still cheaper than building a new coal-fired power plant.
Solar Energy Index is expected to trade at 435.15 USD by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate it to trade at 520.77 in 12 months time.