Wood Mackenzie: China will continue to dominate the global PV market

According to a study by market research and consulting firm Wood Mackenzie, China exported $ 52 billion worth of wafers, solar cells and modules last year, up 64 percent from $ 32 billion in 2021 and more than double the $ 22 billion exported in 2020. Exports included wafers for 41 gigawatts (GW) of total power (up 44 percent year-over-year), cells for 24 GW (up 111 percent) and modules for 154 GW (up 42 percent).
56 percent of exported modules went to Europe. Southeast Asian countries accounted for 31 percent of exported cells, due in large part to U.S. tariffs on modules from China: A high proportion of modules manufactured in Southeast Asia, often by Chinese companies, with cells imported from China are shipped to the United States.
According to Wood Mackenzie, the Chinese solar industry maintained its advantages in terms of production costs in 2022 and was able to offer its products up to 57 percent cheaper than manufacturers in the U.S. and EU. The main reasons for this were lower energy and material costs, economies of scale and government support. Module production in the U.S. and EU, on the other hand, is »not competitive without subsidies.«
According to the analysis, China’s production capacity for wafers and cells available for export will increase to 230 GW by 2026, more than enough to meet global demand outside China, which is expected to reach 170 GW. In contrast, the 149 GW of export capacity expected for modules leave »some room for other markets to expand module production.«
Alex Whitworth, research director at Wood Mackenzie, expects the Chinese solar industry to remain dominant in the coming years. Investment activated by the U.S. under the Inflation Restriction Act (IRA) would stimulate production there. »But costs still favour imported modules, and even as more local module production comes online in coming years, there will be persistent dependence on imports of components from Asia.« In Europe, on the other hand, the EU is advocating trade restrictions to increase the share of domestic products, but lacks strategies to accelerate capacity expansion and replace imports. India also has »great ambitions« to increase domestic production, but financial support for this is insufficient.
© PHOTON