IHS Markit: Lithium ion battery prices won't drop until 2024
Business data firm IHS Markit predicts that lithium-ion battery prices will not fall until 2024 due to rising metal prices, soaring demand for electric vehicles (EVs) and China's near-monopoly on the industry. The analyst house compiled a list of cleantech trends for 2022 and said that under the current green hydrogen project schedule, the world is expected to experience a shortage of energy storage media in 2025.
Regarding the fierce demand for lithium iron phosphate batteries for electric vehicles, IHS, a London-based agency of S&P Global, predicts that a 5% increase in battery component prices this year will increase the overall cost of static battery projects by about 3%.
The analyst house had proposed a 10-20% rise in lithium-ion battery prices "later in 2021" and predicted that price tags would not return to a downward trajectory for two years - a development that would depend on manufacturers expanding capacity as well as electric Demand from car makers is finally cooling. The forecasted green hydrogen bottleneck over the decade is partly due to announced projects, including plans for nearly 250 GW of electrolyzer capacity laid out last year – up from 70 GW announced in 2020, and an estimated 70 GW in 2019. to 15 GW. But IHS forecasts that further electrolyser production plans this year and next will help ease supply constraints, and it reiterated its estimate of green hydrogen demand in Europe that up to 250 GW of solar power capacity is expected to be needed this decade. IHS pointed to moves by the U.S. and India to pursue onshore solar manufacturing, and expects the logistical and input cost issues that drove up solar panel prices last year will continue to drive up costs this year, especially over the next four months. However, the market data research house did say that new manufacturing capacity for solar panel raw material polysilicon is coming online faster than expected, solar cell wafers are becoming more efficient and new wafer producers are entering the market.
While solar and wind prices are likely to continue to rise this year, clean energy remains competitive, in part because banks are used to backing such projects and the world's continued enthusiasm for green finance, which is cheaper to finance, said IHS.
smaller scale
According to IHS Markit, solar projects with a generation capacity of no more than 5 MW will account for 45% of new PV arrays this year, with China and Germany driving more than 60% of demand in the sector. Brazil will continue to show market demand for projects under 5 MW, and net metered PV arrays installed before next year will not need to pay grid connection fees; the mature small-scale solar project market in the United States and France will welcome new entrants, IHS Markit may include Japan, India, and Italy, the graph shows.
Despite higher panel prices, rooftop battery packs for homes and businesses remain competitive because they compete with retail electricity prices, not the wholesale electricity price levels that utility-scale projects have to contend with, IHS said.