Technology advancement

Accelerated Advancement of TOPCon Technology Changes Demand for EVA and POE Resin-Industry-InfoLink Consulting

As part of the pursuit of carbon neutrality, major regions of the world have introduced policies favoring renewable energy, which has significantly increased the demand for renewable energy. Solar installation has grown exponentially in recent years, exceeding forecasts. Of all things, continuous technological advancements underpin solar development. PERC, which appeared in 2015, and replaced Back Surface Field (BSF) to become mainstream in 2019, will remain its dominance for the next two to three years. Yet it is inevitable that PERC cells will reach their theoretical limit, a situation leading to the turning point in technology.

Easy development of TOPCon technology

The discussion of next generation technology after PERC revolves around n-type TOPCon and HJT, as well as xBC. All three techniques can co-exist in the market, but how quickly they can help improve cell efficiency and cost will determine their position and capacity expansion. Among which, TOPCon is more favorable to traditional cell and module manufacturers due to its compatibility with PERC lines. In September, announced TOPCon capacity expansions exceeded 350 GW, with over 40 GW materialized. As Jinko, Tongwei, Trina and JA Solar step up TOPCon expansion, nameplate capacity is expected to exceed 70GW by the end of the year.

Against the backdrop of significant growth in TOPCon’s capacity and production from major manufacturers, InfoLink estimates TOPCon’s shipment will be around 20 GW this year, a clear growth from the 2 GW to 3 GW in the past. Its market share should reach 7%. In 2023, the shipment of which is expected to increase to 60 GW, with a market share increasing to 20%. TOPCon is expected to reach over 100 GW of shipment and reach 30% market share in 2024.

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POE encapsulant match with TOPCon

Module assembly is a key processing step in the solar supply chain, and the rapidly growing industry is driving demand for encapsulants. EVA, with better optical performance, lower bonding property and cost, and good compatibility with p-type cells and modules, has dominated the market in the past decade. POE, with better moisture barrier as well as higher weatherability and PID resistance, is becoming a better option for n-type manufacturers as TOPCon emerges. This is because TOPCon cells, whose front silver contains aluminum, are more sensitive to water vapor and therefore require a stronger water barrier. EVA, on the other hand, can break down and produce acid in a hot, humid environment, thereby reacting with the glass and corroding the busbar, resulting in degraded module performance. Therefore, major n-type module manufacturers have explored or adopted pure POE encapsulant or encapsulant containing POE resin.

Resin Resin Supply and Demand

While global solar installation reached nearly 270 GW this year, module production is estimated at 340 GW considering shipping and inventory factors. This translates to approximately 1,520,000 MT of resin demand. Of which 1,270,000 MT come from EVA resin and 250,000 MT from POE resin. Compared to 1,330,000 MT of EVA and 310,000 MT of POE resin supply this year, supply is tight relative to demand.

Going forward, global neutral module demand is expected to reach 326 GW in 2023 and 380 GW in 2024, with total module production expected to exceed 400 GW in 2023 and reach nearly 500 GW in 2024, taking into account stocks. Moreover, as TOPCon’s capacity continues to grow, the demand for POE resin will also increase rapidly. The demand will vary depending on the encapsulant used by TOPCon manufacturers, as shown in the following scenarios:

Scenario 1: If TOPCon modules use an EPE encapsulant for both sides on a glass-to-glass or glass-to-backsheet module, such a combination will have the lowest POE resin demand. In this scenario, the demand for EVA and POE resin will stand at 1,670,000 MT and 300,000 MT respectively in 2023 and 1,780,000 MT and 360,000 MT in 2024. Considering an estimated EVA resin supply of 1,690 000 MT in 2023, the supply will be insufficient in this case.

Scenario 2: If TOPCon glass backsheet modules use pure POE encapsulant on the front and EVA encapsulant on the back, while 70% of glass-to-glass modules use pure POE encapsulant on both sides and 30% of modules glass-to-glass use EPE encapsulant on both sides. , the demand for EVA and POE resin will be 1,530,000 MT and 390,000 MT respectively in 2023 and 1,530,000 MT and 520,000 MT in 2024. In this scenario, 2023 will see a tight supply of EVA resin, while 2024 will see a tight supply of POE resin.

Scenario 3: If TOPCon glass backsheet modules use pure POE encapsulant in the front and EVA encapsulant in the back, while glass-glass modules use pure POE encapsulant, the demand for EVA and POE resin will reach 1,480,000 MT and 420,000 MT in 2023 and 1,450,000 MT and 580,000 MT in 2024 respectively. POE resin will be in short supply in 2023 and will become extremely restricted in 2024.

Scenario 4: If TOPCon modules use pure POE encapsulant on both sides for glass-to-glass and glass-to-backsheet formats, the demand for POE resin will be the highest. In this scenario, the demand for EVA and POE resin will respectively reach 1,420,000 MT and 480,000 MT in 2023 and 1,350,000 MT and 660,000 MT in 2024. In this case, the supply of POE resin will be insufficient in 2023 and 2024.

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According to InfoLink’s survey, scenarios 2 and 3 are more similar to the actual situation, which estimates the demand for EVA and POE resin at 1,480,000-1,530,000 MT and 390,000-420,000 MT respectively in 2023; 1,450,000-1,530,000 MT and 520,000-580,000 MT in 2024. By combining EVA resin and POE, the supply of both will be tight in 2023. In 2024, EVA resin supply will start to be surplus, while POE supply will become short.

POE proves to be a better product for n-type modules with its performance in water vapor barrier and PID resistance. Currently, POE resin is mainly supplied by Dow, LG and Mitsui Chemicals. The growth of POE resin will be based on the allocation of production lines from these manufacturers to PV customers. Domestic POE production in China will not come out until after 2024. If the penetration rate of n-type products improves or overseas POE manufacturers are unable to supply POE resin to manufacturers of PV, the supply of POE could be lower than the demand, while the manufacturers of modules will be forced to use an encapsulant which is not only made of POE.