(Bloomberg) -- China’s government is preparing to intervene to halt soaring polysilicon prices that have suppressed demand for solar panels.

The Ministry of Industry and Information Technology is in the midst of “intensive progress” in leading relevant departments to coordinate on the issue, according to Wang Bohua, head of the China Photovoltaic Industry Association. 

A call to the ministry seeking comment went unanswered.

Prices for the ultra-conductive material have surged to a 10-year high, propelled by strong adoption of clean energy and supply constraints after several factories halted output for maintenance. Higher costs have begun to suppress demand, especially for giant utility-scale solar farms that are more price sensitive, Wang said at the group’s mid-year meeting Thursday, according to a report from Red Star News. 

“The price issue has had a serious impact on our industry,” Wang was quoted as saying. “This was the hottest topic in the entire industry in the first half of this year.”

It’s unclear exactly what the government could do to cool prices, but follows similar efforts urging lithium producers to coal miners to rein in escalating costs of their output. 

The ministry should allow high prices to balance the market by cooling demand and incentivizing more output, Daiwa Capital Markets analyst Dennis Ip said in a note. New factories are scheduled to come online that should eventually bring polysilicon prices back down. 

Even with the higher prices, China’s solar installations more than doubled between January and June and are expected to blow away previous records for the full year, according to Wang’s presentation at the meeting.

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