Have you been wondering how the solar sector has developed over the past year? Would you like to know about the solar targets that have been achieved in 2023? Would you like to know what Above has been doing to further the growth of solar in 2023?
This week’s blog provides detailed information on the number of installations, capacity, and manufacturing developments in the past year. Additionally, we discuss the necessary steps to sustain the growth of the industry.
The 2023 solar industry in numbers
Increased funding for renewables has led to the installation of record volumes of solar PV globally. According to research provider BloombergNEF (BNEF), solar PV installations increased by 64% between 2022 and 2023. BNEF forecasts a total of 413 GW of newly built solar PV for 2023. Much of this (240 GW) is in mainland China. Altogether, there are now 33 countries globally installing over 1GW each year. [1]
Russia’s invasion of Ukraine in 2022 reshaped the world in many different ways. It sent shock waves across global energy markets and forced many countries to reassess their energy use. Consequently, providing emphasis on a reason other than the climate crisis to shift, from fossil fuels to renewable, including solar PV.
European figures are available from SolarPower Europe, the association for the European solar PV sector. These indicate that a record 55.9 GW of solar PV was installed across the 27 EU member states in 2023. That’s a 40% growth from 2022 and a doubling of the market in just two years. 2023 is the third year in a row with annual growth rates of at least 40%. On average, the EU now has 585 W installed solar power per capita, compared with 466 W/c in 2022. The EU’s residential, commercial and industrial rooftop solar PV sector grew 54% year-on-year. [2]
Growth of solar in 2023 – EU Annual Solar PV Installed Capacity 2000-2023
Is solar growth going to continue?
For the first time, 14 of the 27 EU markets are at GW scale, an increase of 40% compared to 2022. By 2025, SolarPower Europe expects this list to expand to 18 markets. It also expects this level to remain until 2027. [3] In the future, the association projects a 19% growth rate for the EU. It expects 73.8 GW of installations for 2025, followed by 84.2 GW in 2026 and 93.1 GW in 2027. The utility-scale solar sector is expected to grow from 89.6 GW in 2023 to 222 GW in 2027. [4]
Despite these impressive statistics, the solar PV sector is at a critical point. The urgency caused by Russia’s invasion of Ukraine and rising energy prices has subsided. Wholesale gas and oil prices are falling again. Besides, as SolarPower Europe points out, a large proportion of the 2023 growth stems from 2022 orders not completed due to the lack of solar contractors.
However, market conditions are changing due to decreasing energy prices and inflation. Inflation, delays with permits and grid connection issues present a challenge. These challenges particularly affect utility-scale solar, which faces a six percentage-point decline in market share for 2023. [5]
Growth of solar in 2023 – World annual solar PV market scenarios 2023-2027 – Solar Power Europe
Solar Manufacturing Outlook for 2023
Just five countries account for over 90% of global solar manufacturing capacity. China is the largest, with the capacity to produce solar modules with an output of over 500 GW per year. That’s 80% of the world’s manufacturing capacity. [6] With an increase in production capacity, the sector is benefiting from lower prices for products, from silicon to solar modules.
Prices for modules have reached a record low – in November 2023, they were $0.128 per Watt. [7] According to BNEF, demand for solar PV is dwarfed by the scale-up of manufacturing capacity. The total module capacity of Tier 1 manufacturers is 839GW[8], and there is currently a massive buildup of inventory. That’s in part because lower electricity prices make it more difficult for solar plants to compete with other electricity sources. However, the utilisation rate of solar manufacturing is down from close to 60% to below 40% in 2022. The International Energy Agency (IEA) forecasts that the utilisation rate of solar manufacturing will remain below 40% until 2030. [9]
As of 2023, at least 57 module manufacturers had established factories in the EU. Their total module production capacity currently stands at around 14.6 GW, up 59% from 2022 (9.1 GW). [10] However as European cell capacity still relies mostly on outside-EU wafer imports, EU module manufacturers cannot source cells locally. Reshoring to the level of international competition will take years. Besides, not all the required production equipment is available from European manufacturers today. As a result, SolarPower Europe no longer considers the target of re-shoring 30 GW of manufacturing capacity by 2025 feasible. Instead, it expects that this target will now be reached by 2030.
What needs to be done to build on the growth of solar?
The RePower EU strategy is aiming at 420 GW of additional EU solar capacity by 2030. However, the EU is lacking a framework to develop a well-integrated manufacturing chain. That’s why SolarPower Europe is calling for an EU solar industrial policy and more investment. It highlights the US Inflation Reduction Act (IRA) and the Indian Production Linked Incentive Scheme (PLI) as role models. Both have incentivised investment in scaled solar PV module factories. The European Central Bank may provide its own solutions for reducing the cost of capital for green investments in Europe. [11]
In future, large-scale solar PV should be made more attractive by facilitating financing and connecting arrays to the grid. Across EU countries, it currently takes an average of four years to connect ground-mounted PV projects to the grid. One reason for this is that grid connection procedures and operations have yet to be modernised and digitised. Another reason is the slow rollout of smart grid technologies and Big Data analytics. The Solar Connection project has developed recommendations for grid connection procedures, network planning and investment, and flexibility deployment. [12]
Above’s contribution to the solar industry in 2023
Above Digital Solutions Solar Growth in 2023
In 2023, Above worked on more than 1,070 solar projects all over the globe. Altogether, we delivered over 9.27 GW of IEC-compliant aerial thermographic inspections. Additionally, we mapped and monitored more than 57,500 hectares of sites in development and under construction. Our tech team has run 163 software releases, ensuring continuous improvement and development of our platform SolarGain. In addition, we have expanded our global reach by welcoming colleagues from all corners of the world. Solar PV is a scalable, affordable solution on the way to a 1.5C world and to energy security. We’re here to support the solar industry as part of the global energy transition.
Take a look at the digital solutions that help our customers build and operate solar plants more effectively with digital tools.
Manage multiple development projects efficiently with Digital Construction Management.
Get an accurate solar plant health report with Aerial Thermographic & HD Inspections.
Set up your solar portfolio for life with the SolarGain Pro digital health record, perfect for warranty claim management and technical due diligence.
A big thanks to Solar Power Europe for providing a valuable Global PV Market Outlook Report, we are proud members.
[1] https://about.bnef.com/blog/global-pv-market-outlook-4q-2023/
[2] https://www.solarpowereurope.org/insights/outlooks/eu-market-outlook-for-solar-power-2023-2027
[3] https://www.solarpowereurope.org/insights/outlooks/eu-market-outlook-for-solar-power-2023-2027
[4] https://www.solarpowereurope.org/insights/outlooks/eu-market-outlook-for-solar-power-2023-2027
[5] https://www.solarpowereurope.org/insights/outlooks/eu-market-outlook-for-solar-power-2023-2027
[6] https://iea.blob.core.windows.net/assets/42b23c45-78bc-4482-b0f9-eb826ae2da3d/WorldEnergyOutlook2023.pdf
[7] https://about.bnef.com/blog/global-pv-market-outlook-4q-2023/
[8] https://about.bnef.com/blog/global-pv-market-outlook-4q-2023/
[9] https://iea.blob.core.windows.net/assets/42b23c45-78bc-4482-b0f9-eb826ae2da3d/WorldEnergyOutlook2023.pdf
[10] https://about.bnef.com/blog/global-pv-market-outlook-4q-2023/
[11] https://www.solarpowereurope.org/insights/outlooks/eu-market-outlook-for-solar-power-2023-2027
[12] https://www.solarpowereurope.org/insights/outlooks/eu-market-outlook-for-solar-power-2023-2027
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