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The Photovoltaic Power Systems Program of the International Energy Agency (IEA-PVPS) has published its new report “Snapshot of Global PV Markets 2024”, in which highlights the main perspectives and trends. Despite record installations, concerns remain over profitability and manufacturing dynamics, underscoring the need for strategic interventions and policy support to navigate towards a resilient and sustainable PV ecosystem.
In 2023, despite record volumes of installed PV, the year ended with uncertainty around manufacturers profitability and slower than expected deployment for local manufacturing projects in many proactive countries. The accumulated installed capacity reached 1.6 TW after adding about 407 GW to 446 GW of DC from new photovoltaic systems. Uncertainty around the actual conversion rate of recorded AC to DC volumes is leading to wider estimates as global volumes grow.
By relying on methodologies that take into account the difficulties of reconciling a multitude of reporting methods, the difference in volumes between the lower and upper estimates has become so significant that they now equal major regional markets. The importance of harmonized recording methodologies is becoming increasingly evident, as discrepancies make it increasingly difficult for national statistics to provide a clear picture of import and export values ??and natural market capacities. Until such methods become widespread, expert studies will be necessary to better understand market volumes and dynamics.
Regional Market Outlook: Growth Trends and Sustainability Concerns
The rebound in the Chinese market growth rate above 120%, resulting in 235.5 GW (official data) or 277 GW (IEA adjusted estimate -PVPS), may not be sustainable; however, continued growth is still expected. Other key regional markets, such as Europe (39% growth) and the US (57%), also grew as the attractiveness of photovoltaics was confirmed even though electricity market prices have returned to pre-Ukraine conflict levels. ; For example, in European markets the range from 50 euros ($53.4)/MWh to 100 euros/MWh is still high enough for photovoltaics to be competitive. Germany (14.3 GW), Spain (7.7 GW), Poland (6.0 GW) and Italy (5.3 GW) installed more than 5 GW in 2023, while a dozen other European markets installed more than 1 GW.
The US market returned to a more expected level in 2023 after being limited by network connection queues and administrative procedures in 2022. For its part, Brazil, the other strong market in the Americas, maintained the trend of the previous year and added another 11.9 GW. India, the third key domestic market after China and the US, remains framed by barriers such as network access, administrative procedures and financing. Installed 16.6 GW.
This evolution of the global market, in which, despite record low module prices, regional markets outside China mostly recorded steady growth, was insufficient to absorb all the excess capacity, and is a clear indicator that in many markets the reduction of module prices is no longer a significant lever for the massive development of new capabilities.
Manufacturing dynamics: oversupply, price pressures and technological changes
The oversupply of PV modules in 2023 has shed light on the difficulty of aligning production and demand in an international market driven by both market forces and by different national policies. The continued increase in manufacturing capacity in China far exceeded the markets ability to absorb the availability of new modules. Domestic demand in China, driven by favorable local policies, translated into more than 235.5 GW, ensuring the absorption of a portion of the excess supply. Elsewhere, high but insufficient growth has led to estimated global inventories of around 140 GW, enough to supply markets outside China for a year.
The general industry that is putting new manufacturing capabilities in place is moving from PERC to TOPCon (among other n-type technologies), and this, combined with the increase in manufacturing capacity, has created a more than competitive situation in the market of modules. As manufacturers lowered module prices throughout the year to move stocks of both the older, lower-performance PERC technologies and the newer TOPCon technologies, buyers have been able to purchase modules at Extremely competitive low prices. The growing controversy surrounding the record prices of late 2023 modules in the international market has led the sector to debate unsustainable price dumping, especially in Europe, where Chinese modules accounted for more than 95% of imported modules. , a level much higher than that which supplies the Indian import market (around 60%), for example.
Navigating towards sustainable growth: need for supportive policies and industrial strategies
These low prices have not been able to move all inventories and have affected profitability and new manufacturing projects. In early 2024, several Chinese manufacturers that were still largely viable in 2023 called for urgent action in China to prevent the collapse of the entire industry, as did smaller manufacturers outside China. In other countries, the expectation that new jobs in the now widespread photovoltaic manufacturing sector can offset lost jobs in the fossil sector can only be met if strong support policies are deployed, given the context of extremely competitive from China, but effective policies have promising results, as in the US, Turkey or India.
Data from the “ Snapshot of Global PV Markets 2024 ” report underscores the urgent need for concerted action and strategic planning within the PV industry. Global market dynamics in 2023 have demonstrated a growing desire to “future-proof” the industry through more equitable geographic distribution of manufacturing capacity, built on sincere collaborations across the value chain and leveraging strong competencies. existing throughout the world. Proactive measures and collaborative initiatives will be critical to shaping a prosperous and sustainable global PV market in the coming years. |
