China, the world's largest solar PV market, is likely to exit 2023 with over 150 GW new capacity installed, adding another 165 GW in 2024 and 170 GW in 2025 to take the cumulative capacity to 900 GW by 2025-end, eventually exceeding 1 TW mark in 2026, according to Rystad Energy's latest analysis.
Rystad's 2023 guidance for Chinese solar installations is even higher than the 120 GW to 140 GW revised forecast offered by the China Photovoltaic Industry Association (CPIA) in July this year (see CPIA Raises Solar Installation Forecast For 2023).
Yet, it is much lower than about 210 GW BloombergNEF expects the country to end up with this year.
This stupendous growth over the next 3 years will come after it took 13 years to reach the 500 GW mark which should be achieved by 2023-end, accounting for around 40% of global capacity. China had already reached 490 GW at the end of July 2023 with a total 97.16 GW installed in 7M/2023 (see Chinese Solar Installations Growing Strong).
Within H1 this year, China has already invested RMB 134.9 billion ($15.8 billion) in solar PV construction, which according to Rystad is 3.4 times more than what's invested in thermal power during the same period.
While large-scale solar is growing strong, it remains concentrated in the northwest region where solar and land resources are abundant. High-voltage transmission networks are being laid to bring power from the northwest to the southern and eastern regions since this is where the power demand centers lie.
In the coastal regions specifically, large-scale utility PV developments are not feasible due to lack of land availability and higher costs.
Distributed solar then becomes the application of choice as a viable alternative.
Rystad Energy's Senior Renewables and Power Analyst, Yicong Zhu said, "Although most distributed PV systems are installed on rooftops, not all of them are used for residential purposes. Around two-thirds of the distributed PV capacity in China is utilized by the commercial and industrial sectors and these projects can vary from tens to more than 100 MW."
The 26 Chinese provinces have a cumulative goal of installing 443 GW new solar capacity by the end of 2025 under the country's 14th Five-Year Plan (FYP). Of this, 206 GW has already been installed as on June 30, 2023.
Henan and Fujian provinces have surpassed their targets, while some others are less than 20% away from the target. Not all are as fast though. Shanxi, Inner Mongolia, Gansu and Qinghai need to install over 20 GW more.
China is also taking solar intermittency seriously by encouraging new utility– scale projects to add storage capacity. The government is also proactively building pumped hydro to meet seasonal changes in energy demand. Rystad counts 49 GW total pumped hydro capacity in China at the end of June 2023, forecasting it to grow to 64 GW by 2025, exceeding 120 GW by 2030.
Compared with the 500 GW solar capacity forecast for China, the world's 2nd largest solar market, the US will account for a global total of 145 GW or 12% at the end of 2023, according to Rystad analysts. By 2026, the US should represent approximately 209 GW or around 11% of the global total.