China has started exporting Solar panels in higher rates than before

blue solar panel boards

If the Chinese industry dedicated to the manufacture of solar modules has a ceiling, 2023 does not seem like the year in which it will reach it. At least as far as export capacity is concerned. The latest data from its General Administration of Customs show that many more gigawatts of panels are leaving the factories of the Asian giant today than a year ago, destined for the rest of the planet, especially Europe and, to a lesser extent, America. And that, given how big and fast Chinese muscle has grown in recent years, is an interesting fact.

The figures are significant both for the “still picture” they leave, and, above all, for what they tell us about the trend in the market.

What does the data say? That China has started 2023 by strengthening its export footprint. The Customs figures collected by InfoLink Consulting show that in January 2023 the country exported 14.85 GW of solar modules, which shows a more than notable increase if viewed with perspective: 32% compared to the previous month and 55% compared to January last year. In February the export flow marked 14.82 GW, with a year-on-year rise of 6%.

And beyond the figures? Beyond the GW figures or percentages, InfoLink analysts leave an interesting read. At the end of 2022, the Chinese industry encountered a “low season” due to the stock that its foreign clients had accumulated during the previous months. The forecasts were that this slowdown would continue during the beginning of 2023, but —explains the consultant , based in Taipei— “the data reveals a spectacular increase.”

“This rebound shows how the impact of module stocks is surprisingly transitory, underscoring faster-than-expected growth in overseas PV demand,” they conclude.

How much went to Europe? Well, a good pinch. The old continent imported considerably more “made in China” modules than a year ago: 8.6 GW in January and 8.4 GW in February, which leaves year-on-year increases of 120 and 48%, respectively. “In 2023 the block imported 17GW of modules from China, 77% more than in the same period last year,” the analysts note.

According to his calculations, throughout 2022 his European clients received 86.6 GW, of which a part would still remain pending installation. “Still, the data shows that the European market is recovering strong inventory withdrawals, which the block expects will be necessary to accommodate the rapid increase in demand,” they point out. His forecast goes through “growing demand.”

And outside of Europe? The trend is worse in the Asia-Pacific market, where exports of Chinese panels experienced year-on-year declines of 13 and 47% during the first two months of 2023. In total, the region imported 5.6 GW, 36% less than in 2022. The decline is partly explained by India’s decision to introduce a Basic Customs Tariff (BCD) on imports of modules, which altered forecasts of purchase of the clients of the country. “Local manufacturers imported large quantities a quarter before the BCD came into effect, resulting in a year-on-year drop,” he notes.

In the American market InfoLink identifies imports of Chinese modules equivalent to 2.6 GW in January and 1.9 GW in February, which leaves a monthly increase of 58% and a monthly decrease of 24%, respectively. The weight of Brazil stands out, the main importing nation in the region with 3.2 GW throughout the first two months of the year. Its market has also been marked by legislative changes, such as Law 14,300, which charges a network fee to distributed generation projects. “It had a big impact,” says InfoLink.

Are the data surprising? Beyond the growth between months or interannual, the Customs data does nothing but confirm a reality already verified by researchers, international agencies and even the employers of the sector : China has gained considerable weight on the photovoltaic map. At the end of 2021, the Harvard Kennedy School published an eloquent dossier on the subject. His calculations are quite strong: if in 2000 China produced less than 1% of solar panels, in 2020 its percentage of supply was already 70% .

“China’s share in all key stages of solar panel manufacturing is over 80% today, and for key elements such as polysilicon and wafers it is projected to rise to over 95% over the next few years, over the base of the current manufacturing capacity under construction”, stated from the IEA, the International Energy Agency in a study last summer.

And what does that weight of China mean? A dependency in the supply chain that UNEF, the Spanish Photovoltaic Union, warned about not long ago, which precisely for this reason demands a greater national manufacture of solar panels. The IEA also admits “imbalances” in the market after, over the last decade, manufacturing capacity has shifted from Europe, Japan and the United States to China thanks largely to the policy of innovation and large investments driven from Beijing.

However, his bet also has a positive reading: a significant reduction in manufacturing costs that—acknowledged by the IEA—has helped boost photovoltaic technology. China has been instrumental in reducing the costs of solar PV around the world, with multiple benefits for clean energy transitions.

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