- BNEF has offered an upward revision of its global solar PV installation forecast for 2023, up to 415 GW
- Forecast revision is due to low module prices that currently have dropped to 12.8 cents/W in the free trade market
- It pegs China to lead with 240 GW of the total installations this year; however, Wood Mackenzie believes the country will report 230 GW of wind and solar energy deployments in 2023
Bloomberg New Energy Finance (BNEF) has revised its global solar PV installation forecast for 2023 to between 410 GW and 415 GW, with China contributing as much as 240 GW. In comparison, Wood Mackenzie’s guidance for China seems quite conservative as it pegs Chinese solar and wind energy deployments in 2023 to a ‘record-breaking’ 230 GW.
Wood Mackenzie does not specify individual capacity addition for wind and solar, but its forecast exceeds the official target of 160 GW wind and solar capacity China was chasing for 2023 (see NEA Releases 2023 Energy Roadmap).
In a recent podcast with BNEF’s Dana Perkins on Solar Supply Glut Crushes Margins But Buildout Booming, BNEF Lead Solar Analyst Jenny Chase said the market intelligence group has raised its previous global forecast of 392 GW (see BloombergNEF’s 2023 Solar Installation Forecast).
She attributes ‘super low’ prices of solar modules as the primary reason for revising the forecast. Right now, a standard solar module in the free trade market costs 12.8 cents/W, below anyone ever expected it would drop to, even below the experience curve.
For Europe, BNEF views the current oversupply situation as demand for 2023 pulled forward to 2022 when sellers bought too many modules anticipating demand, but now the warehouses are likely to still have inventory of about a year. EUPD Research believes Chinese solar module exports to the EU should go up to 87 GW by 2023-end (see EUPD Pegs EU Solar PV Installations At 60 GW).
Chase believes while installations are going to be higher annually since 252 GW was installed globally in 2022, solar module supply is even more this year. More than 500 GW panels are being made in 2023, she added.
According to Wood Mackenzie’s latest report How China became the global renewables leader, while China is expected to invest $140 billion on expanding its wind and solar capacity in 2023, Europe is expected to deploy 75 GW wind and solar capacity. The US is forecast to add 40 GW of wind and solar this year.
“As we came out of COVID-19 lockdowns this year, it’s impressive to see how far ahead China really is. While some other markets are moderating renewables targets, China has pushed up its 2025 wind and solar outlook by 43% or 380 GW in just a couple of years,” explains Wood Mackenzie’s Vice President, Head of Asia Pacific Power and Renewables, Alex Whitworth.
Taking a prudent approach, China is sprucing up its grid infrastructure budgeting $455 billion for the same from 2021 and 2025, an increase of 60% over the previous decade. Wood Mackenzie analysts say this includes over 1,000 km long transmission lines which have unlocked more than 100 GW of renewables development in inland China.
The share of coal in power generation is also dropping steadily, down 10 percentage points in the last 5 years to about 55% today. Around 80% of the reduction was replaced by renewables and the rest by nuclear power. Growth in renewables has been made possible by low solar and wind curtailments rates, thus contributing to project economics.
According to the report, falling interest rates, low energy costs, intense price competition among domestic suppliers, and government support for Research & Development and manufacturing have all supported falling costs in China.
At the end of September 2023, China’s cumulative installed solar PV capacity exceeded 520 GW with the addition of 128.9 GW during 9M/2023 (see China Solar PV News Snippets).
Corrigendum: The article was updated to reflect upper end of BNEF’s global solar PV forecast for 2023 at 415 GW, which was earlier inadvertently mentioned as 450 GW.
