A new report from Wooden Mackenzie states that China will maintain greater than 80% of the world’s polysilicon, wafer, cell and module manufacturing capability from 2023 to 2026. The nation invested over $130 billion into its home photo voltaic business in 2023.
The report, “How will China’s growth have an effect on international photo voltaic module provide chains?” finds that greater than 1 terawatt (TW) of wafer, cell and module capability is forecasted to come back on-line by 2024 inside China, which means that the nation’s capability is ample to fulfill annual international demand now by way of 2032.
“China’s photo voltaic manufacturing growth has been pushed by excessive margins for polysilicon, know-how upgrades and coverage help,” mentioned Huaiyan Solar, senior guide at Wooden Mackenzie and creator of the report. “And regardless of robust authorities initiatives for growing native manufacturing in abroad markets, China will nonetheless dominate the worldwide photo voltaic provide chain and proceed to widen the know-how and price hole with rivals.”
Sturdy authorities insurance policies in abroad markets have began to extend native photo voltaic manufacturing, however they’re nonetheless not cost-competitive in comparison with Chinese language provide. A module made in China is 50% cheaper than that produced in Europe and 65% cheaper than these made in the USA, in accordance with the report.
The US and India have collectively introduced greater than 200 gigawatts GW of deliberate module capability since 2022, pushed by the Inflation Discount Act (IRA) in the USA and the Manufacturing Linked Incentive (PLI) in India.
Credit score: Trina Photo voltaic
“Regardless of appreciable module growth plans, abroad markets nonetheless can not remove their dependence on China for wafers and cells within the subsequent three years,” Solar mentioned.
China will proceed to be the worldwide technological chief with its bulletins to construct greater than 1 TW of n-type cell capability. This represents 17-times extra capability than the remainder of the world.
Trying outdoors China, India is forecasted to overhaul Southeast Asia because the second-largest module manufacturing area by 2025, which shall be pushed by India’s robust PLI incentives.
Oversupply and intense competitors will characterize the photo voltaic provide chain going ahead and is already driving cancellations of some growth plans. Issues in regards to the market’s oversupply are primarily aimed toward outdated manufacturing traces that produce decrease effectivity merchandise, such because the p-type and M6 cells. Demand for p-type cells started to say no in 2023, and Wooden Mackenzie analysts count on it to be solely 17% of provide by 2026.
“Oversupply will undeniably hinder a few of the present growth plans. Greater than 70 GW of capability in China has been terminated or suspended prior to now three months,” Solar mentioned. The photo voltaic manufacturing business in China is coming into a difficult time. Module producers shall be compelled to take orders at a loss, scale back capability or shut down fully.
Information merchandise from WoodMac
