Over the past two years, the photovoltaic industry has experienced tremendous growth, mainly due to the transformation in the energy sector. This growth has led to an increase in industry scale and installed capacity to unprecedented levels. According to TrendForce, the global new photovoltaic installed capacity is expected to reach 474GW in 2024, which represents a 16% year-on-year increase. It is worth noting that this growth rate is significantly slower than the 59% growth rate observed in 2023.
EU: Excess supply and slowing demand growth
SolarPower Europe has recently released its market outlook for 2023-2027. According to the report, the EU's solar installed capacity is expected to reach a new record high of 56GW in 2023, significantly greater than the 40GW added in 2022. This marks the third consecutive year the European solar market has grown by at least 40%. The growth rate in photovoltaic installed capacity in the EU is anticipated to slow down to 11% by 2024, and the new installed capacity is expected to reach 62 GW.After experiencing a growth rate of more than 40% for three consecutive years (mainly due to the impact of the energy crisis), the high growth rate in the new photovoltaic installed capacity in the EU will come to an end in the future. Because with the growth of installed capacity, further new investments in power grids and energy storage are needed, the progress of investment will restrict the growth of the photovoltaic market.Walburga Hemetsberger, the CEO of SolarPower Europe, has emphasized that solar energy has already played a crucial role in helping Europe during the crisis, and now it's time for Europe to reciprocate by supporting solar energy deployment. According to the report, Europe needs to achieve an average annual deployment of 70GW by 2030, which is yet to be achieved.
The report also predicts that Europe's new photovoltaic installed capacity will continue to grow, with an expected increase of 19% from 61.6 GW in 2024 to 73.8 GW in 2025. By 2026, the installed capacity is expected to reach 84.2GW, and 93.1GW by 2027.However, the association has warned that if tariffs are imposed and trade barriers are further raised, the demand for solar energy may slow down or even shrink further. On the supply side, there could be an oversupply in 2024 due to rising component inventories and slowing demand in Europe.
In 2023, Germany is the largest photovoltaic market in the EU, with 14.1GW of new installed capacity, and the installed capacity hits a record high. Germany is the leader among EU countries, and the opportunities and challenges of photovoltaics in Germany can well reflect the situation in Europe as a whole. As we all know, due to the impact of the energy crisis and other impacts, the entire European household distributed photovoltaic market surged in 2023. Since the second half of this year, European household photovoltaics have entered a bottleneck period, and dealer inventories are high.
In this regard, the German government has formulated policies in 2023 to promote the expansion of large-scale ground power stations and industrial and commercial distribution. These policies are expected to be fully implemented in 2024.United States: Demand growth slows to 10%
The U.S. Energy Information Administration projects renewable energy deployment will grow 17% to 42GW by 2024, with the cumulative deployment of new utility-scale solar, wind and storage reaching 850GW by 2030.
Texas has become the state with the largest newly installed photovoltaic capacity in the United States, accounting for more than 1/5.Since the construction speed of power grid infrastructure still cannot keep up with the growth of electricity consumption, the United States will still face a large power shortage in the future. Therefore, under the expectation of high electricity demand, the United States has a rigid demand for photovoltaic installed capacity. TrendForce predicts that the overall U.S. photovoltaic market will maintain a high growth rate in 2024, with newly installed capacity expected to reach 55 GW, a year-on-year increase of 45%. In addition, the tariff exemption period in Southeast Asia that ends in June 2024 will effectively support the supply of U.S. modules. The qualifications and procedures for applying for additional ITC subsidies will be gradually simplified and clarified, which is expected to drive the U.S. to achieve high growth in photovoltaic installed capacity in 2024.
India: Photovoltaic installed capacity may return to growth in 2024
On the one hand, coal accounts for a very high proportion of India's energy structure, and the decarbonization task is quite heavy; on the other hand, India has abundant resources in photovoltaics and wind power. These two factors have created huge room for development in the local new energy market.Not only is the proportion of coal-fired power in India too high, but to meet the rapidly growing demand for electricity, the country will also add new coal-fired power in 2024. Therefore, India's carbon peak target is more than ten years later than China's. It is not expected to reach its peak until 2040-2041, and the goal of achieving carbon neutrality is 2070. India's renewable energy development goal is to achieve a total installed renewable energy capacity of more than 500 GW by 2030.According to research firm Mercom India, due to delays in project execution, India only achieved 5.6GW of new photovoltaic installed capacity from January to September 2023, a decrease of nearly 47% compared with 10.5GW in the first three quarters of 2022."We remain fully optimistic about our outlook for the first quarter of 2024," Mercom Capital Group CEO Raj Prabhu said.It looks fierce because India’s photovoltaic installed capacity had declined severely in 2023. In 2022, India achieved 13.2 GW of photovoltaic installed capacity. If 16GW can be achieved in 2024, it will take India two full years to grow by 21%.At present, the per capita photovoltaic installation in India is less than 100W. The Indian photovoltaic market has great potential, but the government may place more emphasis on the use of domestically produced solar cells and components in the future.
TrendForce predicts that new installed capacity in Europe will reach 90GW in 2024, and is expected to maintain steady growth in the long term. The overall new installed capacity in the Americas is expected to reach 87 GW, a year-on-year increase of 33%. The main increase is still in the United States. In the Middle East and Africa market, new installed capacity will reach 28 GW in 2024.
Generally speaking, the growth rate of global photovoltaic installed capacity has slowed down in 2024 and returned to rational growth. At present, insufficient power grid capacity and wind and solar accommodation issues have become key factors restricting the high growth of photovoltaic demand in various countries. The global photovoltaic installed capacity potential can only be further released after the power grid completes phased upgrades or energy storage installations are increased. In addition, some regions are facing an economic downturn and limited fiscal expenditures, which may affect the implementation of subsidy policies, thereby inhibiting the release of local installed capacity demand.
