Global solar PV manufacturing expansion plans, as announced under net zero emissions by 2050 (NZE) Scenario, boosting overall module production capacity to around 790 GW by 2027 are on well on track to satisfy projected demand by 2030, according to the International Energy Agency (IEA) that counts solar among clean energy technologies heralding the global energy manufacturing world into a new industrial age.
Apart from solar panels, clean energy technology manufacturing encompasses wind turbines, electric vehicle (EV) batteries, electrolyzers for hydrogen and heat pumps along with their supply chain. According to the IEA, by 2030 the global market for key mass-manufactured clean energy technologies will be worth around $650 billion annually, 'more than 3-fold increase' from current levels, provided all countries fully implement their announced energy and climate pledges.
Jobs created by these industries can grow to nearly 14 million by 2030, up from 6 million today. However, the IEA warns of concentration of this industrial activity in one region alone.
"As we have seen with Europe's reliance on Russian gas, when you depend too much on one company, one country or one trade route – you risk paying a heavy price if there is disruption," said IEA Executive Director Fatih Birol.
He offers a word of caution saying, "It's important, though, that this competition is fair – and that there is a healthy degree of international collaboration, since no country is an energy island and energy transitions will be more costly and slow if countries do not work together."
In terms of solar PV manufacturing, the report writers believe the world's solar module manufacturing capacity is 'far in excess' of current demand since its global average utilization rate in 2021 was less than 50%. Global solar cell manufacturing capacity, with the inclusion of announced expansion plans if completed, is likely to grow to around 810 GW by 2027, also enough to satisfy projected demand.
Wafers too are on track with an expected global production capacity exceeding 790 GW by 2027. While an average utilization rate of 85% in all 3 manufacturing stages gives a surplus of 14 GW for modules, 36 GW for cells and 22 GW for wafers, the IEA argues that solar PV manufacturing capacity needs to further increase to exceed demand since manufacturers can't be operating at maximum capacity always.
Despite the growing global clamor for decentralizing solar PV manufacturing, China is likely to hold on to its role as the world's largest supplier in the space with the IEA expecting it to account for 78% of global modules, 85% cells and 94% wafer manufacturing capacity in 2027, going by the current expansion plans that are highly concentrated in the Asian country.
In its latest report Energy Technology Perspectives 2023 (ETP-2023), the IEA states, "If all announced projects to expand manufacturing capacities were to materialize and all countries implement their announced climate pledges, China alone would be able to supply the entire global market for solar PV modules in 2030, one-third of the global market for electrolyzers, and 90% of the world's EV batteries."
European Union (EU) will still remain highly dependent on imports for solar PV and despite the almost everyday announcements for US solar manufacturing, thanks to the Inflation Reduction Act (IRA), the IEA sees the situation being 'somewhat similar' here.
Since the world's top 5 manufacturers plans to double their capacity in these 3 segments, they are likely to continue to dominate their current market share. These include LONGi and Zhonghuan Solar accounting for around 50% global capacity for wafers, LONGi, Tongwei, Aiko and Trina Solar representing 40% of cells, and LONGi, Trina Solar, JinkoSolar and JA Solar claiming 40% of module manufacturing.
Even when it comes to processing and refining of critical minerals needed for solar PV, China stands at the top as it accounts for 80% of the announced additional production capacity to 2030 for copper. To ensure security of supply, it calls for international collaboration and strategic partnerships in this zone.
The IEA also recommends a strong policy framework to give clean energy project developers and investors to give them a competitive edge and also help bring online manufacturing facilities with short lead times of around 1 year to 3 years on an average. "Government policies and market developments can have a significant effect on where the rest of these projects end up," reads the report.
Complete IEA report is available for free download on its website.
Some of the biggest names in the world of solar manufacturing, as appearing in the IEA report, LONGi, Trina Solar, JA Solar, JinkoSolar, and Tongwei are coming together for TaiyangNews Virtual Conference on Solar Module Innovations 2023 Looking Back and Forth on January 31, 2023. Registrations to the event are free and can be done here.
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