China is expected to wrap up the year with ascending solar installations and gradually improved utilization and production capacity, says data from industry body Chinese Photovoltaic Industry Association (CPIA).
The downstream market is growing rapidly
According to the statistics from CPIA, in the first 10 months of this year, China’s newly installed photovoltaic installations increased by 98.7% year-on-year, setting a new record for the same period of the previous year, with a cumulative installed capacity of about 360 GW.
The latest statistics released by the National Energy Administration revealed that in the first three quarters of 2022, China added 52.6 GW of solar installation, of which 17.27 GW were large-scale power plants and 35.33 GW were distributed. Installation in north China, east China and central China are among the tops, accounting for 30.0%, 25.0% and 19.1% of the new capacity respectively.
Distributed installation is once again overtaking centralized power stations, and the “county-level trail” model, which requires public buildings and factories in town and cities to be covered at 50% by solar panels, in particular has become the primary growth driver for distributed PV in 2022. By the end of September this year, the trial has completed the filing of about 90 GW, with 30 GW to be grid connected.
Upstream manufacturing is growing strongly
The rapid downstream market also triggered strong growth in upstream manufacturing. In the first nine months of this year, the country’s output of polysilicon, wafer, cell and module reached 550,000 tons, 256 GW, 209 GW and 191 GW, up 52.8%, 43%, 42.2% and 46.9% year-on-year, respectively. There are more than 480 production expansion projects executed by November, estimated CPIA.
Meanwhile, research and development investment in the manufacturing industry is also increasing, with more specialized new players emerged in the industry. From January to November 2022, the laboratory efficiency of photovoltaic crystalline silicon cells was refreshed 11 times. As of November, 87 solar enterprises of wafer, cell, solar glass, inverter, equipment and junction box were awarded for their outstanding performance in specialization, specialty and innovation. The conversion efficiency of heterojunction solar cells has set a new world record of 26.81%, and new breakthroughs have been made in the development and pilot test of perovskite laminated cells.
The country also created brilliant in export with first-rate products. During the first 10 months of this year, the volume and prices of China’s solar products were all on the rise. The total export including silicon wafer, cell and module reached a record high of USD 44.03 billion, up 90.3% year-on-year. The export of modules increased by 85.8% year on year. Traditional market maintains strong demand, especially after the demand for solar products in European countries increased, the market share of export to Spain, Germany, Poland and other countries increased significantly.
However, China’s solar supply chain also faces huge price pressure this year. Stage mismatch of supply and demand leads to sharp fluctuations in the price of some links and the prices remained high. Currently the prices of all links have been declining to varying degrees with the help the macro-control and industrial urges.
Huge installation potential
CPIA forecasts 85 GW to 100 GW solar installation throughout 2022, and CITIC Securities expected 140 GW installation in 2023. In particular, with the release of new production capacity of silicon materials and other links from 2023, the cost will gradually drop. The installed capacity of ground power stations previously suppressed by low returns may recover, and the installed capacity ratio is expected to rise again. It is estimated that the year-on-year growth rate of ground power stations is expected to reach 80%, while the distributed is also expected to maintain a growth rate of nearly 40%.
