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The assumption that solar PV costs will continue falling forever is crashing into messy market and geopolitical realities. The polysilicon spot price has spiked since the New Year amid frantic buying stoked by fears of shortages, which in turn exacerbated supply chain bottlenecks. Prices might have peaked for now, but US lawmakers are pushing to crack down on Chinese imports over allegations of forced labour in Xinjiang factories. Solar projects must now contend with an uncertain cost panorama as polysilicon becomes swept up in wider US-China tensions.

Inflation is everywhere, and solar energy is not immune. The rising cost of steel, aluminium and copper is pushing up PV project costs, compounding a more pressing issue: the soaring price of polysilicon, which “skyrocketed” by almost 160% between early 2021 and early June, according to Bernreuter Research.

Large utility-scale projects are being pushed out into 2022 and major PV module ma…