China has long been recognized as the world’s leading manufacturer of solar products and continues to dominate the global solar supply chain, with at least an 80% share of the total manufacturing capacity for photovoltaic module production. Now, as the world transitions towards green energy, China’s exports of solar modules are expected to gain further momentum in 2023, boosted by the increasing global demand for solar power and Europe’s plan to reduce energy imports from Russia.
According to industry analysts, China’s increasing dominance in the solar industry, along with its high-tech and high-value exports, including solar products and lithium batteries, have positioned the country as a key supplier for the world’s solar power needs. Last year, China’s exports of solar cells rose by almost 68%, while Germany relied heavily on Chinese supplies for its solar industry. More than one-third of Germany’s small and medium-sized enterprises in the solar industry rely heavily on Chinese supplies, and without the core components provided by Chinese companies, some companies might not be able to build and develop solar power plants.
The EU was the largest destination for China’s PV exports in 2022, buying nearly $23 billion worth of products, up 113% year-on-year, which is equivalent to about 84 GW of modules, more than half of China’s total module exports in 2022. BloombergNEF predicts that the market for newly built PV modules will grow by 8 GW in Europe in 2023, with China expected to contribute significantly.
Despite many countries’ efforts to establish solar manufacturing capacity, the capital expenditure required to do so remains significant, particularly in the US and Europe, despite decreasing costs due to efficiency improvements and cheaper equipment over the last decade. The EU, for example, doesn’t yet have a solid plan to support its solar manufacturing industry, although the European Commission presented a Green Deal Industrial Plan to enhance the competitiveness of Europe’s net-zero industry and support a rapid transition to climate neutrality in February 2023.
It’s worth noting that overseas revenue has become critical for China’s top PV module manufacturers, which are also the world’s top six, including Jinko Solar, LONGi Green Energy Technology, and Trina Solar. Jinko Solar, which is based in Shanghai, saw its shipments of PV modules rise to 44 GW last year, ranking second worldwide, and with 14 production bases worldwide, the company is optimistic about the prospects for solar module shipments this year. Strong demand from Europe, Australia, Latin America, and the Middle East substantially contributed to the company’s better-than-expected performance last year, and overseas revenue accounted for a major part of its total revenue.
In summary, China’s exports of solar modules are expected to continue their upward trajectory in 2023, driven by increasing global demand for solar power and Europe’s plan to reduce energy imports from Russia. As the world transitions towards green energy, China’s dominance in the solar industry and its high-tech and high-value exports position the country as a key supplier for the world’s solar power needs.