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China’s solar energy capacity expanded in the first four months of 2023, driven by strong demand and a surge in investments in the sector. According to National Energy Administration (NEA) figures, the country’s solar power generating capacity increased by 36.6% year on year to 440 million kilowatts between January and April 2023.
In addition, investments in solar power generation projects in the country amounted to 74.3 bn yuan ($10.6 bn) during the same period, witnessing a 156.3% rise from last year. This coincides with a drop in the average price of solar modules to 1.7 yuan ($0.24) per watt this year, from 2 yuan ($0.28) per watt in 2022.
China is the world’s biggest generator of solar energy. Previously, China’s grid-connected solar capacity spiked by 155% year on year to 33.66 gigawatts (GW) between January to March 2023, as per NEA. Photovoltaic power generating facilities provided around 54% of this newly added solar power capacity. The rest was contributed by centralised photovoltaic power-producing facilities.
Looking forward, the China Photovoltaic Industry Association anticipates that the country will install 95 to 120 GW of solar energy capacity in 2023, up from the record 87.4GW achieved last year. Along these lines, Fitch Ratings said: “China will continue increasing the deployment of renewable power in 2023…The NEB expects China’s solar power capacity to reach 490GW by end-2023, which implies robust new installations of 97GW in 2023.”
Rise in China’s solar energy exports fuelled by Europe
While there has been a rise in China’s solar energy capacity in 2023, the country’s exports of photovoltaic modules have also increased this year.
“In March, Europe imported 12.5 GW of modules from China, a 49% month-on-month increase from February’s 8.4 GW and a 76% year-on-year increase compared with March last year. In 2023, the bloc imported 29.5 GW of modules from China, 77% more than in the same period last year,” said InfoLink Consulting.
“As a result of the energy crisis caused by Russia’s war in Ukraine last year, PV demand in the European market increased significantly…Another contributing factor behind the rise of import volumes is Chinese manufacturers’ strategic stock-up in Europe before the high season,” it added.
Furthermore, China’s solar energy exports of photovoltaic modules to Asia-Pacific countries jumped by 3% year on year to 3.9 GW in March of 2023. Along with that, exports to the Americas in March amounted to 3.1 GW of modules, a 144% increase from last year. Brazil alone imported 2 GW of modules from China in March.
Besides that, countries in Middle East Asia imported 1GW of solar modules during the same period, marking a 59% year on year increase. Meanwhile, countries in Africa imported 731 MW of modules from China, with South Africa accounting for 467 MW in March.
Rising Chinese solar energy exports can be attributed to the fact that over 80% of all solar panel manufacturing, including the production of polysilicon, ingots, wafers, cells, and modules, is carried out by China. Additionally, the nation is home to 10 of the top manufacturers of equipment for solar PV production, as per International Energy Agency.
“China’s massive domestic market scale and supply chain are in a league of their own…The race to dominate global solar markets this century is not over, but Chinese companies have a strong lead and are not slowing down,” said Alex Whitworth, Research Director at the global research and consultancy group Wood Mackenzie.
