Changes in the proportion of BoM and China’s overseas expansion

As renewable energy grows globally, PV becomes a key player in the industry. While main materials have received most attention, bill of materials (BoM) like PV glass, frames, encapsulants, and silver paste are also critical. These materials influence the performance and lifespan of modules and are essential for the stability and efficiency of PV systems.

The BoM market evolves along with the PV industry’s rapid development. R&D in high-efficiency materials, introduction of customized products, and global expansion are now crucial for companies and investors in the PV industry. Understanding market changes and future trends is vital for success.


 

Production cost structure (202309 VS 202409)

The cost structure of the PV industry has changed significantly since 2023. In September 2023, polysilicon accounted for 15%, glass for 11%, and frames for 10% of the cost of producing TOPCon glass-backsheet modules. Polysilicon was the major cost component. However, polysilicon’s cost share dropped to 8% as polysilicon prices decline continuously in 2024, while the share of materials like PV glass (13%), frames (13%), and silver paste (11%) increased. The proportion of eight types of BoM rose from 48% in 2023 to around 57% in 2024.

This shift reflects price declines across the industry since 2024, compressing profit margins and pushing PV manufacturers to seek new ways to reduce costs. As polysilicon prices drop, the importance of BoM’s price and quality has grown. Many manufacturers invest more in optimizing BoM through new materials, improved processes, and supply chain adjustments to reduce costs and stay competitive.

As polysilicon prices stabilize, BoM will play an even larger role in production costs. Companies will focus on controlling costs and improving the performance of these materials to stay competitive. This will boost overall production efficiency and make modules more competitive and profitable. BoM becomes a key part of reducing costs and increasing efficiency in the PV industry, driving it toward higher efficiency and sustainability.
 

BoM capacity expansions in Southeast Asia

As the global PV market grows, overseas expansion is becoming a significant trend among Chinese BoM companies. With growing demand for clean energy in Europe, America, Asia, and the Middle East, the global supply chain for BoM is improving. China, a major production base for these materials, has seen many companies expand production overseas, especially in Southeast Asia (Cambodia, Malaysia, Thailand, and Vietnam). This helps them adapt to trade policies, lower logistics costs, shorten supply cycles, and tap into growing local markets. Manufacturers in China, India, South Korea, and other countries are also entering the market.

Lower labor costs, increased production capacity, and higher demand for BoM in Southeast Asia have attracted more Chinese BoM companies to set up factories. These companies form an ecosystem with local module makers and boost exports and local production of key BoM to meet US market policy changes and comply with local regulations and incentives. Especially for the exemption from anti-circumvention. Apply for anti-circumvention exemption (pick four out of six): Southeast Asian modules using cells made from Chinese wafers, but with more than four of the six BoM materials (silver paste, aluminum frame, glass, backsheet, encapsulant, and junction box) made outside of China, to meet clients' US shipping requirements.

Overall, the global expansion of BoM companies strengthens their ability to manage supply chain risks and meet customer needs. It also promotes collaboration in technological innovation, laying the foundation for future market growth.

As the PV market evolves, the supply and demand of key materials like silver paste, glass, encapsulants, frames, backsheet, junction boxes, Ribbon, and Diamond wire are uncertain. Will there be enough raw materials? How will prices change? Could new technologies bring opportunities? Contact us for a sample of the "PV Bill of Material Market Report" to explore the upcoming challenges and opportunities.