With PV manufacturing capacity to more than double by 2024, the industry is “rushing headlong” into a supply glut, a recent report by the International Energy Agency (IEA), cautions.

Even though large capacities are coming up in several regions, there is no escaping from dependence on China, the report titled ‘Renewable Energy Market Update Outlook for 2023 and 2024’, says.

In 2022, global solar PV manufacturing capacity increased by over 70 per cent to reach almost 450 GW — China accounts for over 95 per cent of new facilities throughout the supply chain.

In 2023 and 2024, global solar PV manufacturing capacity is expected to double, with China again claiming over 90 per cent of this increase. The forecast expects significant wafer, cell, and module manufacturing expansion in the ASEAN region through investments from Chinese manufacturers.

India and manufacturing plants

For the first time, a relatively large deployment of manufacturing plants is also forecast for India and the US, thanks to industrial policies introduced last year, the report says.

Newly announced PV manufacturing in India, the US, and Europe reaches 30 GW for polysilicon and 100 GW for module assembly.

Integrated, module, and thin-film manufacturing plants make up nearly 85 per cent of new facilities, while capacity lags for dedicated manufacturing for new cells (less than 1 per cent), ingots and wafers (9 per cent), and polysilicon production (6 per cent).

Integrated manufacturing plants produce three or more components, but nearly 80 per cent of this announced capacity does not include dedicated polysilicon production.

In addition, while new module assembly plants will have a capacity of nearly 30 GW, this amount is not matched by the capacity announced for other components, especially cells, and polysilicon. “These new plants will therefore still need to import cells and other components from China,” IEA says.

Manufacturing capacity projection

According to the report, global solar PV manufacturing capacity is projected to reach nearly 1,000 GW in 2024. This is sufficient to meet annual demand in the IEA’s Net Zero Emissions by 2050. That is on the equipment side.

On the capacity additions side, the report notes that global renewable capacity additions could reach 550 GW in 2024 — almost 20 per cent higher than in an earlier forecast of IEA.

“This is mainly due to the more rapid deployment of residential and commercial PV installations, assuming a faster implementation of recent policies and incentives. The upside for utility-scale onshore wind and solar PV projects mostly depends on the pace of permitting, construction, and timely grid connection of projects under development,” says IEA.