Domestic poe breakthrough! photovoltaic cost reduction welcomes new fulcrum, core material costs expected to decline significantly

POE diagram Cell film (Source: Solarzoom)

Plastic Vision reported on January 26th from China National Petroleum Corporation that... China National Petroleum Corporation Dushanzi Petrochemical Company The POE adaptation and transformation project has achieved a historic breakthrough, with nearly 60,000 tons of POE products produced throughout the year, marking the successful large-scale production of domestically developed gas-phase POE products. More crucially, the company's gas-phase process is the first of its kind in China, consuming only 60% of the energy of the international mainstream solution method, and the production process has no solvent emissions and low product volatile content, perfectly meeting the green and low-carbon development needs of the photovoltaic industry. Its core grade UL0588 has reached international advanced levels in key indicators such as light transmittance. Photovoltaic films manufactured with it exhibit excellent performance in weather resistance and moisture barrier properties, providing a stable and reliable domestic alternative solution for the photovoltaic industry.

Coincidentally, in January 2026, Sinopec Tianjin Nangang Ethylene Project The POE unit's implementation of a 100% domestically produced DCS system has been put into operation, becoming a benchmark event in China's petrochemical industry. Equipped with Loongson CPU and Kylin operating system, and adopting the completely independent and controllable HOLLiAS MACS IC DCS system, the unit achieves full-chain autonomy from core hardware to software ecosystem. This system, with over 10,000 points and a 100% stability rate, not only guarantees the long-term stable operation of the POE unit but also sets a replicable model for the independent development of the petrochemical industry. Relying on the integrated advantage of 16 million tons/year of refining and 2.5 million tons/year of ethylene, the Tianjin Nangang POE unit will further expand its production capacity to provide sufficient raw material supply for the downstream photovoltaic industry.

In stark contrast to the accelerated mass production by domestic companies, international giants are expanding their production capacity relatively cautiously.

Mitsui Chemicals, Inc. The 120,000-ton/year POE plant on Jurong Island, Singapore, is in the trial operation phase, but commercial operation is not planned to start until March 2026, and it is explicitly stated that it will not immediately operate at full capacity. Mitsui Chemicals executives admit that increased competition in the photovoltaic panel market and supply and demand pressure from inventory adjustments in China have forced them to explore new application areas such as packaging and engineering plastics. So, why is POE so important to the photovoltaic industry? What domestic POE projects have been put into production in the past year? Will the photovoltaic industry benefit from cost reductions due to the localization process of the core material POE? This article will provide a systematic interpretation.

1. Why POE Become a photovoltaic industry Essential materials ？

POE, a high-end material with unique performance, combines the processability of plastics with the high elasticity of rubber, making it a core raw material for strategic emerging industries such as photovoltaics. As early as 2015, Chinese technicians initiated technological breakthroughs in polyolefin elastomer technology. From the end of 2023 to 2024, the transformation from laboratory to industrial production was realized. In 2025, Dushanzi Petrochemical accumulated a production of 58,000 tons of polyolefin elastomer, completing the entire chain of construction of complete technology and process routes.

As a core material in the photovoltaic module encapsulation process, POE was long subject to technological blockade by foreign companies, with import dependence once reaching as high as 95%. The high price became a significant bottleneck restricting cost reduction and efficiency improvement in the photovoltaic industry. Now, with leading enterprises such as China National Petroleum Corporation and China Petrochemical Corporation successively achieving large-scale production of POE, the domestic photovoltaic industry is ushering in a new cost reduction fulcrum, and the competitiveness of the industrial chain will be further enhanced. This industrial revolution triggered by the localization of core materials is reshaping the global photovoltaic supply chain landscape.

POE's unique performance advantages are key to its position as a core material in the photovoltaic industry, and these advantages are becoming even more pronounced in the N-type battery era.

More weather-resistant POE encapsulant film, with no hydrolyzable ester bonds in its molecular chain, fundamentally avoids the defect of EVA encapsulant film producing acidic substances due to hydrolysis and corroding battery cells. Experimental data shows that the moisture permeability of POE encapsulant film is only 1/8 of that of EVA. In a damp-heat environment of 85°C and 85% humidity, the power degradation rate of its encapsulated components is 1.2 percentage points lower than that of EVA. After 2000 hours of ultraviolet aging test, the yellowing index of EVA encapsulant film reaches 8.5, while POE is only 3.0. In harsh environments such as deserts and coastal areas, the service life of components encapsulated with POE can be extended to 30 years, 5 years longer than that of EVA-encapsulated components, significantly reducing the cost of the entire life cycle of power stations.

Top-notch anti-PID performance Under harsh testing conditions of -1000V, 85℃, and 85% RH, EVA encapsulated modules experienced a power loss of 28% within 96 hours, while POE encapsulated modules lost only 3%. This characteristic makes POE the "best partner" for N-type batteries. With the capacity share of N-type batteries such as TOPCon expected to exceed 60% by 2025, POE demand is poised for explosive growth.

Adapt to new scenario requirements. In 2025, the market share of dual-glass modules climbed to 43%, and their backsheet-free design placed higher demands on the weather resistance and moisture barrier properties of encapsulant films, making POE the preferred material. In distributed photovoltaic projects in high-humidity regions like East and South China, the power generation gain from POE encapsulant films was particularly evident. Actual measurement data from a distributed power station in Zhejiang showed that the first-year power generation of POE-encapsulated modules was 2.3% higher than that of EVA, with a levelized cost of electricity (LCOE) that was 0.012 yuan/kWh lower over the entire lifecycle. Data indicates that the penetration rate of POE encapsulant films has surged from less than 5% in 2020 to 42% in 2025, becoming the core growth pole of the photovoltaic encapsulant film market.

2. Domestic POE Concentrated production launch, cost reduction dividends are emerging.

Since 2025, the domestic POE field has seen a flurry of significant breakthroughs. In addition to the two giants, CNPC and Sinopec, and those that started production earlier, Bei Ou Yi (Completed China's first industrialized POE plant with a capacity of 30,000 tons/year in December 2023) Wanhua Chemical (Phase I, 200,000 tons/year, put into production in June 2024, product purity 99.5%, has been stably supplying leading encapsulant film manufacturers such as Foster and Swick), multiple companies have successively achieved POE mass production, forming a diversified supply pattern.

April 2025 Maoming Petrochemical A 50,000-ton/year POE industrial pilot plant has commenced operation with a total investment of 998 million yuan. It utilizes a self-developed metallocene catalyst and solution polymerization process, with raw materials self-produced from multiple factory areas. The plant produces two types of elastomers, breaking the foreign technology monopoly, filling domestic gaps, and providing data support for subsequent industrialization, ensuring the independent control of the new energy materials supply chain.

September 4, 2025 Shenghong Petrochemical The 100,000-ton/year POE project has announced its commencement of production, with the first batch of 320 tons of superior-grade products simultaneously shipped for delivery.

In October 2025, Liaoning achieved success with a single feeding of materials. Dingjide The first production line of the Phase I main unit of the petrochemical POE high-end new material project is operating smoothly, and its cumulative shipment volume has exceeded 5,000 tons to date.

The mass production of these enterprises is not a simple capacity expansion, but is based on breakthroughs in core technologies: Wanhua Chemical has overcome the independent technology of α-olefins, breaking the monopoly of foreign companies in the field of POE raw materials; Dushanzi Petrochemical has focused on the research and development of high-end polyolefins since 2015, and completed the transformation from laboratory to industrial production in 2024, achieving a "from 0 to 1" leap in gas-phase technology; Sinopec has achieved 100% localization of the POE production control system through the synergy of the entire industrial chain.

The cost benefits brought by domestic production are beginning to emerge. Previously, POE resin was almost entirely dependent on imports, with international giants such as Dow Chemical and ExxonMobil accounting for over 90% of global capacity. This monopolistic position resulted in high prices, with POE encapsulant film prices exceeding ordinary EVA encapsulant film prices by more than 20% in 2023. With the capacity release of companies such as Wanhua Chemical and Dushanzi Petrochemical, the price of domestic POE resin has decreased by 15%-20% compared to imported products, directly driving down the price of POE encapsulant film. It is projected that POE encapsulant film prices will decrease by 18% in 2025 compared to 2023, with further room for decline. Based on the current price reduction, using domestic POE encapsulant film for a 1GW photovoltaic power station can reduce costs by approximately 20 million yuan.

This price decrease will directly translate to the component sector, driving down costs across the entire industrial chain and further solidifying China's global competitive advantage in photovoltaics. Lower costs will also accelerate the penetration rate of POE encapsulant films, creating a virtuous cycle of "increased capacity – reduced costs – expanded demand." It is projected that by 2027, POE encapsulant films will surpass EVA in market share, becoming the mainstream product for PV encapsulants. Domestic encapsulant film companies have already begun to benefit: Fostec, as a global leader in encapsulant films, already has POE products accounting for over 50% of its portfolio; Xiangbang Technology's pure POE encapsulant films have achieved a light transmittance exceeding 92%, securing a substantial order from Jinko Solar; and Sveck, with its co-extrusion encapsulant film technology, holds a competitive advantage in niche markets. The stable supply of domestically produced POE provides these companies with a solid foundation for participating in global competition.

3. POE Localization benefits more than just photovoltaics.

From an industrial security perspective, the breakthrough in domestic production of POE is of great significance.

Hu Wei, supervisor of the Chemical Industry and Engineering Society of China, pointed out that China's POE import dependence was as high as 95% previously, posing a significant risk to supply chain security. Against the backdrop of complex and volatile global geopolitics, self-reliance in core materials has become crucial for the stable development of the industry. Now, technological breakthroughs and capacity releases by companies such as CNPC and Sinopec not only ensure the supply chain security of the photovoltaic industry, but also transform technological advantages into industrial advantages, providing domestic solutions for other industries that rely on POE, such as automotive lightweighting and high-end packaging.

Looking ahead, domestic POE capacity will continue to expand: China National Petroleum Corporation plans to promote the application of POE complete technology from Dushanzi Petrochemical, accelerating the formation of industrial cluster effects; Sinopec's Tianjin Nangang project will further expand production capacity relying on integrated advantages; the subsequent capacity planning of companies such as Wanhua Chemical and Eastern Sheng Hong are also underway. It is expected that by 2027, domestic POE capacity will exceed 2 million tons, and the self-sufficiency rate is expected to increase to over 80%. At that time, the cost of core photovoltaic materials will see a more significant decline.

The path to cost reduction in the photovoltaic industry is essentially a path to the self-reliance of core technologies. Technological breakthroughs in every====, from silicon material and silicon wafers to POE encapsulant film, are driving the industry towards an era of grid parity.

Edited by: Lily

Source materials: China National Petroleum Corporation (CNPC), Cailian Press, China Petroleum Daily, etc.