Solar sector readying for new challenges

Chinese PV firms lead the world, but overcapacity, price weakness loom

China's solar industry climbed to new heights in 2023, with manufacturing, installed capacity and exports experiencing robust growth and reshaping the global landscape with continuous technological breakthroughs.

According to the China Photovoltaic Industry Association, China saw 163.88 gigawatts of new photovoltaic installations in the first 11 months, marking a remarkable 149.4 percent year-on-year growth. Most months saw triple-digit percentage surges, with March topping 400 percent.

Currently, over half of the nation's new installations of power generators are photovoltaic facilities.

The surge prompted the CPIA to revise its projections for China's new PV installations this year, raising the forecast from an initial range of 120-140 GW to 160-180 GW.

"China's solar power global market share has exceeded 80 percent. Technological prowess is evident in continuous breakthroughs, such as achieving a 33.9 percent conversion efficiency in crystalline silicon-perovskite tandem solar cells, setting yet another world record," said Wang Shijiang, secretary-general of the CPIA.

This rapid growth in PV installations had a significant effect on overall renewable energy capacity, which reached 1.45 billion kilowatts last year. Impressively, this capacity marked a new high and constituted over 50 percent of national power generation installed capacity, said the National Energy Administration.

Solar power alone reached 557.6 million kW as of the end of November, significantly exceeding the NEA's year-end target of approximately 490 million kW set in 2022.

Surges in output, exports

Data from the association further revealed a substantial year-on-year increase of over 70 percent in PV manufacturing output — which encompasses silicon materials, wafers, cells and modules — from January to October. The manufacturing output, including approximately 1.14 million metric tons of polysilicon, around 460 GW of wafers, 404 GW of cells and 367 GW of PV modules, contributed to an output value exceeding 1.3 trillion yuan ($182 billion).

"China holds a dominant position in the global PV supply chain. Benefiting from a complete life-cycle supply chain and rapid advancements in PV power generation technology, China has emerged as a leader, achieving significant cost reductions and shaping the landscape of solar energy on a global scale," said Jiang Yali, a solar sector analyst at BloombergNEF.

Such strong production capacity spurred a remarkable surge in PV exports, with a 90 percent increase in wafers, a 72 percent jump in cells and a 34 percent rise in modules, from January to October, supported by resilient global demand. Because of rapid price declines, PV product exports totaled approximately $43 billion during this period, reflecting a marginal 2.4 percent year-on-year decrease.

Li Shuo, a Ministry of Commerce official, said PV products had become new drivers for exports in 2023. Li said PV exports to economies involved in the Belt and Road Initiative, ASEAN and nations in Africa saw significant growth.

Wang Bohua, honorary chairman of the CPIA, also highlighted the increasing diversification of the PV export markets, with Europe still holding the largest share at 52.9 percent, albeit slightly down from the previous year.