Wood Mackenzie recently has released the latest Global Solar PV Market Outlook Update: Q1 2023, specified photovoltaic policies and market dynamics in various regional markets, and capacity prediction over the next decade.
In 2023, global photovoltaic installed capacity will reach a historic high of over 250 GWdc, an increase of 25% year-on-year, according to the report.
The Chinese market will continue to consolidate its global leading position. By 2023, China’s newly added capacity will reach over 110 GWdc, 40% of the global total. During the 14th Five Year Plan period, the annual increment in China will remain above 100 GWdc.
With the expansion of supply chain, the decline in module prices, and the imminent grid connection of the first batch of wind and photovoltaic large bases, the capacity of centralized photovoltaics is expected to increase significantly in 2023, over 52 GWdc. Installation promotion in county level throughout the country will also support the development of distributed solar.
However, problems such as wind and electricity curtailment risks and auxiliary service costs are gradually emerging in major installed provinces such as Shandong and Hebei. This may slow down investment in the distributed scenarios, and such capacity in 2023 may decline.
Globally, policy and regulatory support will become the biggest driving force for the development of the global photovoltaic market. The US Inflation Reduction Act (IRA) will invest USD 369 billion in the clean energy sector. The REPowerEU Act sets a target of achieving 750 GWdc of solar installation by 2030. Germany plans to introduce tax credits for investments in solar, wind power, and power grids. It is expected that the global solar grid connected installation will grow at an average annual rate of 6% from 2022 to 2032. By 2028, North America’s share in global solar annual installation will exceed that of Europe.
Due to China’s global dominance in the solar supply chain, India, the United States, and Europe are planning to build local supply chains to reduce such dependence. India also imposed basic tariffs of 25% and 40% on imported photovoltaic cells and modules from China in 2022.
Easy installation and short reviewing time make distributed solar a growth point in the Asian market (excluding India). While higher retail electricity prices and multiple incentive policies promoted the capacity of residential solar in Europe in 2022. In 2023, the newly added residential solar in Europe will grow to 16 GWdc, a year-on-year increase of 5%.
In 2022, the installation of residential solar in the United States exceeded 5 GWdc for the first time, despite stronger than expected seasonal declines in installed capacity and price increases in the fourth quarter. Wood Mackenzie predicts that California’s residential capacity will maintain stable growth in 2023, but the implementation of the Net Energy Metering (NEM 3.0) will lead to a contraction in 2024.
In the Latin American market, Chile’s power grid construction lags behind the country’s renewable energy development, making it difficult for the power system to absorb renewable energy, leading to lower than expected renewable energy prices. The national energy commission CNE Chile has launched a new round of bidding for transmission projects to address this issue and has proposed suggestions to improve the short-term energy market. Major markets in Latin America, such as Brazil, will still face similar challenges.
With multiple EU member states planning to deploy renewable energy on a large scale before 2030, many mature markets in Europe are also facing increasingly severe grid bottlenecks, especially in Netherlands.
