China is the world leader in the solar industry.
That’s according to BofA Global Research, which made the comment in a new report sent to Rigzone this week. In the report, BofA Global Research highlighted that the country has about 75 percent of the module, 85 percent of the cell and “a whopping” 97 percent of the wafer manufacturing capacity.
“This has enabled China to install nearly 400 gigawatts (GW) of solar capacity domestically, or about 1/3 of global solar capacity,” BofA Global Research noted in the report.
“The United States, a distant second in terms of solar capacity, has less than 1/3. China’s strong control over solar manufacturing has also led other countries, particularly those in Europe , depend on it,” he added.
In the report, BofA said that as other countries move to expand their manufacturing capabilities to compete, prices have fallen, making both distributed solar projects and utility scale more affordable.
“Fixed PV LCOEs in China and India are now below $50/MWh, below most other energy sources,” BofA Global Research said in the report.
“Even the historically more expensive PV tracking is now affordable for many installation projects, further increasing capacity factors and actual generation,” he added.
“That said, some project costs, such as land leases or insurance, have increased in recent years,” BofA Global Research continued.
Creation of records
An opinion piece published on Wood Mackenzie’s website last month, which was written by Michelle Davis, the company’s global head of solar, and Juan Monge, Wood Mackenzie’s principal solar distribution analyst in Europe, stressed that record solar accumulation is expected in all regions by 2023.
“We expect PV construction to reach record levels during 2023 of nearly 270 GWdc worldwide. This will continue to accelerate to 330 GWdc annually by 2032,” the opinion piece stated.
“China will continue to lead PV manufacturing for at least the next five years. We expect the nation to shift the focus of its module exports to upstream cells and wafers,” he added.
“Policy incentives for local PV manufacturing in the US, Europe and India are not expected to significantly decrease China’s market share in the near term,” the opinion piece continued.
In May, in a statement on its website, Wood Mackenzie noted that China’s solar exports would grow 64 percent to $52 billion by 2022 despite global trade tensions.
The country’s exports were mainly dominated by modules in 2022, WoodMac noted in the statement, adding that Europe remained the country’s top solar module export market with a 56 percent share. Solar cells saw more than 100 percent growth as the global PV market expanded, with Southeast Asia taking a 31 percent share of China’s solar cell exports , WoodMac noted.
Concentrated supply
Last month, Rystad revealed in a statement posted on its site that Europe’s spending on solar imports has almost quadrupled in the past five years, “to over €5.5 billion”. [$6.04 billion] in 2018 to more than 20,000 million euros [$21.98 billion] last year, while the source of supply has become more and more concentrated”.
“A whopping 18.5 billion euros [$20.33 billion]equivalent to 91 percent of all PV import spending, was spent on Chinese products as volatile panel prices affected purchasing decisions,” Rystad said in the statement.
“As China dominates both the production and processing of polysilicon in PV modules, Chinese manufacturers have been increasingly able to undercut the competition on price,” Rystad added.
“Today, panels made in China often cost as little as two-thirds of European manufacturing capacity,” the company said.
In the statement, Rystad noted that Chinese-made PV panels are piling up in European warehouses, “with approximately 40 GWdc of capacity currently in storage, the same amount installed across the continent by 2022.”
“These stored solar panels are worth around €7 billion [$7.69 billion] and could generate enough electricity to power 20 million homes a year,” Rystad added.
“The build-up will only increase this year, with Rystad Energy forecasting 100 GWdc of solar capacity in storage by the end of 2023,” he said.
To contact the author, please send an email andreas.exarcheas@rigzone.com
