L R AS Published on Saturday 10 July 2021 - n° 370 - Categories:evolution-stat, forecasts;
The state of the PV industry, Chinese installations, and the predicted overproduction
China's solar PV demand could easily exceed 100 GW in 2022, after a year of demand
The Chinese government is expected to be "flat" in 2021, according to Asia Europe Clean Energy (Solar) Advisory Co. Ltd. Above all, this organisation announces an imminent massive overcapacity in production, and a major shift in installations in China in favour of the residential sector, with 20 GW installed in China in 2022.
The Chinese domestic market is marked by rising panel prices, which is prompting regional or national authorities such as the National Energy Administration (NEA) to authorise the completion in 2022 of a number of power plants that should have come on stream this year. As a result, by the end of May, only 9.9 GW had been installed, of which 5.8 GW was large-scale and 4.1 GW was residential. Projects approved in 2019/2020 that are not connected by the end of 2021 will automatically be included in next year's quota and will not be subject to a new tender. This explains why the installation estimates for 2021 may be stable and why they swell in 2022
The state of the industry :
According to the AECEA, China's 260 PV manufacturers exported 35.4 GW of product between January and May this year, an increase of 34% year-on-year. Overall, global PV panel production capacity in 2020 reached 320 GW. (+47% over 2019), of which China accounted for 245 GW. China has increased its capacity by 90 GW. This is double the amount of PV installations in that country last year, according to the AECEA. Global demand (and thus actual production) stands at 164 GW, of which 135 GW is in China.
Global wafer production capacity reaches 248 GW in 2020, of which 240 GW was in China. These manufacturers would have produced almost 162 GW last year, out of a global total of 168 GW.
There was no new silicon production capacity between 2018 and the first half of 2020, hence the current shortage situation. China's silicon production capacity in 2020, which is about 420,000 tonnes, is expected to reach an annual output of up to 1.6 to 1.8 million tonnes "for the foreseeable future."
In 2021 and 2022
Wafer capacity will increase in 2021 from 110 to 130 GW, and in 2022 from 170 to 190 GW, bringing capacity at the end of 2022 to 560 GW, while cell capacity is estimated in eighteen months' time at 450 GW
Panel capacity could reach 390 GW by the end of 2021, an increase of 60% in one year and in contrast to the expected global demand of 160-240 GW in 2021 and 2022.
These massive increases in capacity, according to the AECEA, are due to the regulatory power granted to local governments. They have seen the strong growth in photovoltaics and want to take advantage of it by requiring manufacturers to contribute to local development by constructing buildings or schools. Large groups are subject to other activities than industrial production
Distributed photovoltaics will grow strongly as the National Development and Reform Commission (NDRC) has identified distributed solar photovoltaics combined with electrical energy storage, as its second most important project under the circular economy development plan for the period 2021-2025.
At the end of June, China's NEA launched a programme to deploy distributed rooftop solar power. The policy is to be implemented by 15 July
The Energy Research Institute, which is affiliated to China's NDRC, has estimated China's rooftop solar potential at 800 GW, including about 200 GW in Shanghai, Zhejiang and Jiangsu, and 55 GW in Guangdong province. According to the AECEA, 23 provinces and municipalities have already announced their intention to participate in the trial.
In 2021, thanks to the RMB 500 million subsidies, the demand for residential installations could reach 16 GW compared to 10.1 GW in 2020. The residential share will increase in the coming years
PV Magazine of 8 July 2021