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Jun 22, 2023

Rapid Growth of Global Solar Industry Led by China and India as US PV Installations Decline

The global solar industry continues to expand rapidly, with China and India leading the way in new installations. According to a recent report by the National Renewable Energy Laboratory (NREL), China

The global solar industry continues to expand rapidly, with China and India leading the way in new installations. According to a recent report by the National Renewable Energy Laboratory (NREL), China installed 87 GW of solar in 2022, a 59% increase from the previous year. Meanwhile, PV installations in India increased by 51% during the first nine months of 2022, with Germany following at a 22% increase. However, the United States saw a 9% decline in PV installations during the same period, installing only 11.2 GWac of PV in the first three quarters of the year.

In the U.S., California’s Public Utilities Commission recently approved revised net metering rules, which will become effective in April 2023. Exported solar energy will be compensated at rates around 75% lower than retail, with no fixed charges and a transition period. Meanwhile, the country installed approximately 11.1 GWh of energy storage onto the electric grid in Q1-Q3 2022, an 88% increase year-over-year, driven by high levels of residential and grid-scale deployment.

The report also sheds light on PV system and component pricing. From the second half of 2021 to the first half of 2022, the median reported distributed PV system price in Arizona, California, Massachusetts, and New York increased 4% to $4.25/Wdc for systems 2.5 to 10 kW, but decreased 3% to $1.77/Wdc for systems 500 kW to 5 MW. Global polysilicon spot prices began Q4 2022 at around $37/kg but dropped 40% to $22/kg by mid-January, the lowest price in 1.5 years. Global wafer and cell prices also dropped by 40%-50% during this period, while global module prices fell only around 10%. This was due to decreased demand from Europe, but relatively strong demand from China.

In terms of manufacturing, the report notes that U.S. c-Si module production was at approximately the same level as in H1 2019, and thin-film production had grown by 3x (and increased 31% year-over-year). Since the passage of the Investment Tax Credit, over 85 GWdc of manufacturing capacity has been announced across the solar supply chain, including 19 new manufacturing plants. However, the U.S. Department of Commerce issued a preliminary decision in December to impose anti-circumvention duties on some solar panels and cells produced in Vietnam, Malaysia, Thailand, and Cambodia. A final determination is due May 1, 2023.

Finally, the report reveals that 18.3 GWdc of PV modules were imported into the United States in the first nine months of 2022, a 2% decrease from the previous year. In addition, 1.8 GWdc of cells were imported during the same period, an 18% decrease year-over-year.

Overall, the report highlights both the growth and challenges of the global solar industry, with some countries seeing significant expansion in PV installations while others experience a decline. The industry continues to grapple with pricing fluctuations, manufacturing capacity, and trade policies, but it remains a vital player in the transition to a cleaner, more sustainable energy future.