Europe: Expected to add 62GW solar PV in 2024
Máté Heisz, Global Affairs Director of SolarPower Europe, pointed out that in 2023, the newly installed capacity of solar power in Europe reached 55.9GW, a 40% increase from 2022, setting a new historical record. Looking ahead, SolarPower Europe believes that the European market will continue to see strong growth, with an expected addition of 62GW in 2024, 93GW in 2026, and a total cumulative installed capacity projected to reach 576GW by 2027.
Regarding the development potential in various European countries, Máté Heisz believes that Germany, Spain, and Italy will remain the top three major markets in Europe, with an expected annual growth rate of around 20%. However, in comparison, France, the Netherlands, and Portugal face many uncertainties and their future development is less clear.
In terms of local manufacturing in Europe, Máté Heisz revealed that the EU plans to establish a full industry chain capacity of 30GW by 2025, expected to meet 40% of local demand. Currently, the EU is discussing the introduction of industry support policies and new trade barriers, but there is continuous opposition within Europe to trade barriers, with concerns that they may slow down the development of the solar power market.
As the largest solar market in Europe, the future development of the German market cannot be ignored. Jörg Ebel, Chairman of the German Solar Association (BSW), stated that the country's new solar installations reached 14GW in 2023, and by 2026, the annual addition is expected to reach 22GW. Jörg Ebel revealed that the German government is about to introduce a new law, the Solar Package 1, which will greatly drive the development of the solar industry.
While France's solar installations were only 3.4GW in 2023, the future prospects still hold potential. According to Xavier Daval, Vice President of the French Renewable Energy Trade Association (SOLER-SER), the French government is set to announce a new 5-year energy plan (PPE 3), with a target of installing 6-7GW of solar projects annually. Additionally, the government is studying a series of policies to support the solar industry, such as the upcoming Agricultural Solar Law and feed-in tariffs for small ground-mounted installations below 1MW.
United States: Growth in domestic production capacity, cost gap may gradually narrow.
Regarding the current status of domestic manufacturing in the United States and future trends in supply chain development, Sun Huaiyan, Senior Research Consultant in the PV Industry Chain at Wood Mackenzie, pointed out that in 2023, components imported from China accounted for less than 0.1% in the United States, with over 80% of components coming from Southeast Asia, and the rest mainly from countries like India and Turkey. The domestic supply in the United States is significantly lower compared to imports.
Data shows that since the end of 2022, the production capacity of domestic components in the United States has increased from 8GW to the current 12.5GW. Based on current expansion plans, if all announced capacities can be implemented as planned, it is expected that this year, domestic capacity will be sufficient to support the demand for PV installations in the United States. Wood Mackenzie predicts that by 2026, the component capacity in the United States will reach 123.5GW, but due to multiple challenges such as financing, technology, and raw materials, Sun Huaiyan mentioned that it is difficult for these capacities to be fully realized.
Wood Mackenzie data shows that there is still a certain gap between the prices of components manufactured in the United States and those imported from Southeast Asia. Sun Huaiyan stated that in the short term, it is difficult for the United States to control costs below those of Southeast Asia. U.S. manufacturing still relies on government subsidies to maintain a competitive advantage. However, with the increase in domestic capacity, restrictions on imported components by the U.S. government, as well as policy support from the IRA bill to reduce inflation, it is expected that this gap will narrow.
Brazil: Expected to add over 9GW solar PV in 2024.
Brazilian Ministry of Energy data shows that in 2023, renewable energy accounted for a high percentage of 93.1% in Brazil's electricity system. The cumulative installed capacity of solar power has reached 37.2GW, accounting for 16.5%, making it the second largest source of electricity after hydropower. Distributed solar power accounts for approximately 70%, while centralized solar power accounts for about 30%. For the installation expectations in 2024, the Brazilian Solar Photovoltaic Association (ABSOLAR) estimates that distributed projects will continue to be the mainstay of the Brazilian solar market, with an expected addition of 5.98GW, while centralized installations may add 3.4GW. The total new installed capacity is projected to reach 9.38GW, slightly lower than the 10.8GW in 2023.
Rodrigo Sauaia, Executive Director of the Brazilian Solar Association, cited data from Bloomberg New Energy Finance (BNEF) indicating that from 2040 to 2050, solar power will surpass hydropower to become the main source of electricity in Brazil, with a total installed capacity potentially reaching 121GW. Related distributed energy storage will also play an important role in the power structure. The association is working hard to promote policy support and regulatory development to create more opportunities for the development of distributed energy storage and green hydrogen technologies in Brazil.
Middle East and North Africa: Expected to add 11GW solar PV in 2024
Bloomberg New Energy Finance (BNEF) data shows that in recent years, the solar power industry in the Middle East has been rapidly growing, with installed capacity increasing year by year. The region's power structure is currently dominated by oil and gas, accounting for over 85%, indicating significant potential for solar power development. In comparison, the power systems in Africa are mainly reliant on natural gas and coal, but solar and wind power are gradually emerging.
Dr. Kou Nannan, Head of BNEF China Research, pointed out that the Middle East and North Africa region is rich in solar and wind resources, with several countries committing to achieving carbon neutrality in the coming decades. With accelerated population growth, urbanization, and industrialization, the demand for electricity will further increase in the future, providing significant development opportunities for the Middle East and North Africa. According to BNEF statistics, the installed solar capacity in the Middle East and North Africa region was between 7GW-8GW in 2023, with expectations to reach over 11GW in 2024 and around 13GW in 2025.
Yin Muyan, Managing Director of the AIM UAE Global Fund in China, stated that recently, the UAE has hosted several important conferences including COP 28, involving various fields such as solar energy, wind energy, and energy storage technologies. The 2030 plans of various countries in the Middle East demonstrate ambitions in the field of green energy. During COP 28, the UAE President called for transformative global cooperation, pledging to invest $30 billion to promote green energy and climate change solutions, sending a positive signal for global environmental improvement.
Regarding the impact of the Red Sea situation on component exports, Xu Yue, Logistics Director of Huasheng New Energy, mentioned that due to the Red Sea situation, shipping companies have chosen to detour around the Cape of Good Hope, affecting transportation efficiency and increasing transportation costs. This has led to a significant increase in shipping costs on the Shanghai-Europe route, with rates rising up to 600%. Xu Yue estimated that the transportation cost per watt for a 680W TOPCon module was 0.35 RMB/W before the Red Sea crisis, but increased by 208% to 0.108 RMB/W due to the crisis. Therefore, Xu Yue believes that the supply chain crisis caused by the Red Sea crisis poses a significant threat to small and medium-sized exporting enterprises.
Regarding the future direction of the Red Sea situation and trends in the supply chain, Xu Yue mentioned that due to the temporary difficulty in resolving the Israel-Palestine conflict, it may be challenging to change the situation on the Red Sea route in the short term. It is expected that the detour plan will continue for the next two years.
Source：solarbe