(Bloomberg) -- Polysilicon prices jumped by the most in eight months with maintenance scheduled at key facilities, threatening to raise the cost of solar panels as clean energy demand soars.
The average cost of the most expensive grade of polysilicon rose 4.8% to 286.3 yuan ($42.7) a kilogram on Wednesday, according to a statement from the China Silicon Industry Association. It’s the highest price for the material since late 2011.
Prices have been rallying since the beginning of the year on soaring demand for solar panels as governments seek to meet climate goals and wean themselves off suddenly more expensive fossil fuels. Supplies have recently been further tightened after a production plant halted output to perform maintenance, and other facilities are scheduled for downtime in the third quarter, according to the association.
Read more: Solar Panel Material Price Hits Highest in a Decade in China
Higher prices for the material have trickled through the supply chain and increased the cost of solar equipment, hurting profit margins and leading to the cancellation or delay of some projects. Polysilicon prices could continue to rise in the third quarter, further elevating the cost of solar cells and modules, SolarBe analyst Yin Yeze said in a note Wednesday.
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