Wood Mackenzie: China's Solar Exports Boom 64% In 2022 Despite Global Trade Tensions

May 24, 2023 11:07 AM ET
  • High power costs obliged consumers as well as designers from around the globe to get even more photovoltaic panels from China.
  • Europe continued to be the China's top solar module export market with 56% share.

A new report from Wood Mackenzie has revealed that solar exports of China grew 64% to $52 billion in 2022 despite global trade tensions.

Wood Mackenzie research study supervisor Alex Whitworth held that trade tensions have actually taken a rear seats to high power prices driven by the energy situation, as well as this is triggering customers and also designers from worldwide to acquire even more solar panels from China.

Wood Mackenzie states that China's exports were mostly dominated by modules in 2022-- Europe remained the country's top solar module export market with 56% share. However solar cells saw more than 100% growth as the worldwide PV market increased, with Southeast Asia taking 31% share of China's solar cell exports.

US tariffs on Chinese-made modules have driven module manufacturing to Southeast Asia, where numerous producing centers import cells from China.

Chinese modules kept their cost-competitiveness against other markets in 2022 and were up to 57% more affordable than United States and also EU produced modules. This rate gap was primarily driven by product price, where China holds the advantage due to low power expenses, scale advantages as well as government assistance, whereas US and also EU solar module production is not competitive without subsidies, holds Wood Mackenzie.

China On Expansion Spree

Wood Mackenzie analysis held that along with domestic supply needs, Chinese export capacity for upstream wafers and cells will grow to more than 230 GW in 2026. This capacity will certainly be greater than adequate to satisfy worldwide market need outside China of 170-GW by that year.

Readily available module capacity for export in China is likewise anticipated to expand slowly to 149GW by 2026, leaving some area for other markets to expand module production, points out Wood Mackenzie. Extra makers are buying upstream markets which are much more profitable than modules.

US, EU, As Well As India Are No Challenge To China

Whitworth says in Wood Mackenzie report that the US is counting on the IRA, which will certainly allocate a minimum of US$ 41 billion to boost residential manufacturing. However costs still favour imported modules, and even as even more regional module production comes online in coming years, there will be consistent reliance on imports of components from Asia.

" In Europe, the EU is advocating trade limitations to safeguard neighborhood PV manufacturing yet lacks particular policies to push capacity develop outs and also displace imports. India also has excellent ambitions to increase its PV production, however financial support wants to get to aggressive targets," added Whitworth.

With a mature supply chain as well as huge manufacturing capacity for export, Southeast Asia has taken advantage of China-targeted PV trade policies by the United States, as even more module production has transferred to the region. Nevertheless, Chinese suppliers hold 55% of Southeast Asia's PV production capacity, which relies upon Chinese-produced components.

Trade Restrictions Challenge Chinese Manufacturers To Globalise Workflow

"As even more markets require neighborhood jobs and also investment for solar, Chinese manufacturers are well placed to expand as worldwide technology suppliers," included the Wood Mackenzie official.

Companies outside of China also have opportunities, however it will certainly be testing for them to leave China's low-priced supply chain and swimming pool of knowledge that has taken control of a decade to develop.

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