According to a recent study by the International Energy Agency (IEA), solar photovoltaic (PV) manufacturing capacity worldwide has reached the levels recommended by the agency for deployment by 2030. However, the study also revealed that only a quarter of the announced projects could be considered as committed to completion.
The IEA's report, titled “The State of Clean Technology Manufacturing: An Energy Technology Perspectives Special Briefing,” indicated that the announced project throughput, which represents a fraction of the installed manufacturing capacity and relies on the utilization of production facilities, exceeded the required deployment levels by 50% as of the end of March 2023, based on the Net Zero Emissions by 2050 Scenario.
The report further highlighted that manufacturers were already on track to meet the projected demand in 2030 according to the NZE Scenario as of late 2022. This progress was attributed to approximately 670 gigawatts (GW) of throughput expected from project announcements for additional manufacturing capacity.
Solar PV manufacturing has experienced significant growth in recent years, with a compound annual growth rate of 25% from 2010 to 2021. In 2022 alone, global manufacturing capacity surged by 40% to approximately 640 GW, with China accounting for 90% of the growth. During same period, manufacturing throughput reached around 260 GW, indicating a global average utilization rate of roughly 40%.
Notable announcements in the first quarter of 2023 included new manufacturing facilities from industry leaders such as LONGi, Jinko Solar, and Trina Solar. These major projects accounted for 45% of the total additional capacity announced as of Q1 2023.
However, the report revealed that only around 25% of the announced module manufacturing capacity was either under construction or had received final investment decision.
Geographically, the study identified a concentration of clean technology manufacturing, particularly in China. The country currently accounts for about 80% of global solar PV manufacturing operations and holds an 80% share in the solar PV manufacturing pipeline.
LONGi's plant in Taizhou, boasting a capacity of 38 GW, is large enough to supply half of the European Union's (EU) solar PV module capacity additions in 2022. Vietnam and India have the second and third largest installed manufacturing capacities, respectively, but their shares only amount to 5% and 3%.
Furthermore, if all announced projects materialize, the top three producers will maintain their dominance, with a concentration level of approximately 90%. Vietnam is expected to drop to the fourth position, trailing behind India and the United States.
The report also examined the concentration of solar PV components. China has emerged as a dominant player in silicon wafer production, accounting for over 95% in recent years compared to 80% in 2010. China's cell and module production increased to 85% and 80%, respectively, in 2022, from approximately 55%-60% in 2010.
Regarding polysilicon, China's share of the world's manufacturing capacity was less than 30% in 2010, but it surged to over 75% in 2022.
Lastly, China's installed solar PV capacity experienced a compound annual growth rate (CAGR) of over 65%, reaching 427 GW in 2022. This growth rate outpaced that of the United States (40%) and Europe (less than 20%). The United States currently has an installed capacity of 140 GW, while Europe's capacity stands at 200 GW as of last year.
