The surging prices of natural gas from the Russia-Ukraine war this year has led to a global energy crisis, and what followed afterwards is the rapid expansion of renewable energy installations for the purpose of mitigating rising electricity tariffs. As pointed out by BloombergNEF, 2022 saw 268GW of new global solar installations, and the figure is expected to climb to 315GW in 2023.
Jenny Chase, analyst at BloombergNEF, commented that Europe is currently purchasing numerous solar panels at more than 72GW, and is expected to have merely installed roughly 42GW, with a relatively large quantity of existing inventory. China, on the other end of the world, had utilized a significant level of solar power this year under policy incentives, where residential and commercial solar installations that were initially estimated in the beginning of the year to only increase by 99GW have now risen to 126GW.
With that being said, prices of multi polysilicon and solar modules had remained obstinately high this year due to the unabated demand for solar power, and suppliers’ expansions have yet to fulfill the corresponding intensity. Chase also pointed out that both transformers and solar inverters are under short supply, and that solar module prices are bound to fall eventually.
BloombergNEF estimates multi polysilicon to fall from the existing price of US$35/kg to US$10-15/kg next year, while FOB modules would be lowered to US$0.22/W in markets with no major trade barriers. New global solar installations are expected to be 316GW next year, with 48GW coming from Europe.
Europe, relying heavily on Russia’s natural gas provision, has been experiencing energy constraints since the latter’s invasion in Ukraine during February, and is bound to diversify its energy supply. IEA estimated this month that new renewable energy installations will increase by twofold between 2022 and 2027 compared to that of five years ago, while global renewable energy installations will also surpass coal in 2025, and become the largest source of power generation.
IEA commented that the energy crisis is likely to attain 2,400GW of new global renewable energy installations throughout the next five years, equaling the total volume over the past two decades, and a growth that is nearly 30% more than what the IEA had previously projected.
(Cover photo source: Unsplash)