The solar industry is currently navigating a phase of dramatic overcapacity and record low prices, with intense cost pressures extending across the value chain. The pricing squeeze on solar modules has inevitably impacted material suppliers. Simultaneously, the rapid evolution of cell technologies – led by TOPCon, HJT, and XBC – is driving new developments in the module’s bill of materials, especially backsheets and encapsulation materials. This is also reflected in the 5th combined TaiyangNews Market Survey on Backsheets & Encapsulation Materials 2024/25. The survey received responses from 17 companies who have provided the details for 184 products. With 4 new entrants and 2 previous ‘backsheet-only’ suppliers now offering encapsulation materials, this year's survey highlights the growing dominance of encapsulation in the module polymer segment.
While nothing has changed fundamentally, several developments have taken place on the polymer supply side of solar. The encapsulation market has been growing in line with solar manufacturing, touching nearly total shipments of 500 GW in 2023 and over 600 GW in 2024, respectively. As demand and geopolitical factors drive decentralization, production is gradually moving beyond China, albeit in small quantities for now.
There is no alternative to encapsulation materials at present, and the choice is between 2 core polymer chemistries – EVA and POE. In an effort to meet both ends – costs and reliability – the segment has developed a coextruded structure consisting of EVA and POE, called EPE. At the product level, EVA has also been tweaked to white EVA for use on the rear side of the monofacial modules. Transparent EVA retains its dominance, while POE is witnessing increased demand both in its pure form as well as part of EPE, more so for the latter. HANGZHOU FIRST is an unprecedented leader of the segment, commanding more than half of the market share; and the top 3 companies represent around 3/4th of the market. At the recent TaiyangNews Annual Flagship Conference – High-Efficiency Solar Technologies 2024 – Bo Jin, Overseas Sales Manager at HANGZHOU FIRST, provided an insightful overview of the company's comprehensive encapsulation solutions for BC modules (see the presentation here).
The most important developments in the encapsulation segment revolve around compatibility with the changing requirements of cell and module technologies. Gone are the days of ‘one size fits all.’ Encapsulation solutions are now tweaked according to cell and module technologies. Needless to emphasize, TOPCon attracts most attention among all cell technologies and encapsulation solutions should address 2 degradation mechanisms – moisture-induced degradation (MID) and potential-induced degradation (PID). The choice is between POE, EPE and optimized EVA. Tests conducted by several material suppliers and module makers indicate that POE demonstrates the highest reliability, followed by EPE, with EVA performing the least effectively; the order also represents costs from high to low. The choice also depends on the side of the modules – front or rear.
As a reflection of the current high cost-pressure environment that module makers are experiencing, the EPE structure is gaining the highest traction. However, companies are also developing optimized EVA chemistries with low acid formation and better PID combating capabilities. This allows module makers to try different combinations of encapsulation materials on the front and rear, with the front being more critical to attain a better cost-performance ratio.
Encapsulation solutions for HJT have a different set of requisites altogether. In addition to providing a high barrier for moisture ingress, the encapsulant also has to safeguard the HJT module from UV vulnerability leading to UVID. The segment developed a smart solution to convert the UV light into the blue band, which not only avoids UVID but also improves performance with improved light absorptance. The technology can be applied to all mainstream encapsulation variants – EVA, POE and EPE. Using down-conversion encapsulants has now almost become the standard for HJT. However, with more and more TOPCon modules also prone to UVID, the technology is promoted for TOPCon as well.
The backsheet segment is facing challenging times as the industry increasingly favors glass-glass configurations, a shift that has gained even more traction with TOPCon becoming the mainstream technology. Since 2022, the segment has been in a steady decline, with its total market size shrinking to less than half in just 2 years. As this transition unfolded, fluoropolymer outer-film-based backsheet configurations have been losing ground, primarily to dual-sided coated alternatives. Meanwhile, non-fluoropolymer chemistries – both in traditional structures and coextruded designs – are gaining modest traction.
Currently, the primary focus for backsheet manufacturers is to reduce water vapor transmission rates to address the moisture sensitivity of n-type cell technologies. Additionally, a growing number of companies are introducing reflective backsheets. Sustainability, low carbon footprint and recyclability have also emerged as key differentiating factors in the backsheet market.
The text is the executive summary of the Solar Backsheets & Encapsulants Market Survey 2024/25, which can be downloaded for free here.
