Looking forward to the photovoltaic industry in 2024: 1 article amazing makes it clear!

Looking forward to the photovoltaic industry in 2024

In 2024, driven by China’s domestic and international low-carbon development, energy transformation, and other strategies, the photovoltaic industry will continue to maintain a good growth trend, the speed of technology iteration will be further accelerated, and the changes in supply and demand will lead to an increase in the intensity of market competition, and backward production capacity and insufficient competitiveness will be quickly cleared.

photovoltaic industry will maintain strong growth momentum

With the rapid decline in the cost of photovoltaic power generation systems and further consensus on the development of renewable energy in China and abroad, looking forward to 2024, the photovoltaic industry will maintain a strong growth momentum. Efficiency improvements in the photovoltaic industry drive cost reductions.

The domestic and foreign markets in China are accelerating, driving the scale of the photovoltaic industry to continue to maintain rapid growth. In 2024, according to the “Sunnylands Statement on Strengthening Cooperation to Address the Climate Crisis” reached by China and the United States on November 15, 2023, according to the global renewable energy installed capacity to triple by 2030, the average annual scale of the global photovoltaic market in the next eight years will be around 500GW, and the Chinese photovoltaic market is expected to be around 220GW.

According to the International Renewable Energy Agency, if the two countries work hard to maintain 1.5℃, the annual global photovoltaic market size can reach 700GW in the next eight years. It is estimated that the global and Chinese photovoltaic new installed capacity will reach about 200GW and 420GW respectively in 2024. China’s domestic photovoltaic manufacturing industry and export scale will still maintain a growth momentum of more than 30%.

The market share of n-type high-efficiency battery modules is increasing rapidly, and different battery technologies are developing and diversified. In 2024, with the gradual increase in the planned production capacity of n-type batteries and the downstream market demand for n-type batteries, the market share of n-type batteries will increase rapidly, from nearly 25% in 2023 to 50%, and will quickly increase to 80% in 2025, becoming the mainstream of battery technology. With the gradual improvement of battery conversion efficiency, the adoption of rectangular sheet technology, and other advanced packaging technologies, the maximum mass production module power will exceed 700W.

At the same time, different n-type battery technologies are competing for development. TOPCon batteries, which have a better cost-performance ratio and can cover all application scenarios of household, industrial, and commercial distributed and ground power stations, have become the route that companies are competing to deploy, accounting for 84% of the total output of n-type batteries.

HJT batteries are also actively deployed by professional manufacturers and have released large expansion plans. It is expected that the proportion of n-type battery production will reach 12% in 2024; BC batteries benefit from the strong promotion of Longi and Aixu, and their existing and planned production capacity will exceed 55GW, and it is expected that the proportion of n-type battery production will reach 4% in 2024.

There will be a reshuffle on the manufacturing side, and more market participants will emerge on the application side. In 2024, the coexistence of new advanced production capacity and old production capacity on the manufacturing side will inevitably lead to price wars. It is expected that the price of photovoltaic products will remain low, but it also means that backward production capacity and insufficient competitive production capacity will be quickly cleared.

Advanced technology, taking TOPCon batteries as an example, companies need to integrate more than a dozen complex processes and continuously improve and iterate on key process technologies to ultimately achieve a balance of conversion efficiency, yield, and non-silicon cost indicators. This requires battery manufacturers to have a deep accumulation of technology research and development, production, and management experience.

New players entering the industry lack technical reserves, and there are many variables in the implementation of production capacity and ramp-up to mass production. The probability of being eliminated in this round of fluctuations is relatively high, and leading companies will also use their technological advantages to widen the gap with second and third-tier companies. In addition, after the significant decline in supply chain prices, many manufacturers have little profit margin at this stage, and some new production capacity plans have been canceled. It is expected that more expansion plans will be canceled in 2024.

On the application side, in addition to the traditional five large and four small power central enterprises, traditional energy central enterprises such as PetroChina, Sinopec, CNOOC, and China Coal Group have begun to enter the development of photovoltaic power stations strongly, and oil and gas companies have obvious advantages in solar energy resources, power consumption, multi-energy integration, and integrated applications, and have unique conditions. In addition, various regions have also begun to form provincial new energy groups to actively promote them, increasing the variables of the competitive landscape of photovoltaic market development.

The development of centralized power stations has gradually moved westward, and the development of household power stations has gradually moved southward. In 2024, in the field of centralized photovoltaics, as the land use policies for multiple photovoltaic projects such as land, forests, grasslands, and water surfaces are gradually tightened, the development of land for large centralized photovoltaic power stations in the central, eastern, and southwestern regions with more mountains, forests, grasslands, and agricultural land will be more scarce.

In addition, land rents are also soaring, and the development of ground power stations in the central and eastern regions will become more difficult, and the construction of ground photovoltaic power stations will continue to gradually move westward. In the field of household photovoltaics, with the rapid increase in the scale of household photovoltaics, traditional large provinces of household photovoltaics, such as Shandong, Hebei, and Henan, have seen transformer capacity insufficient to support more household photovoltaic access and suspension of filing. The household photovoltaic market has gradually shifted to the south, and the growth in central and southern regions such as Jiangsu, Anhui, Jiangxi, Hunan, Shanxi, Hainan, Guangdong, Fujian, and Hubei is more significant.

The photovoltaic industry integrates energy storage solutions with photovoltaic systems
The photovoltaic industry integrates energy storage solutions with photovoltaic systems

The expansion of overseas photovoltaic manufacturing capacity has accelerated, but its implementation remains to be seen. According to incomplete statistics, by the end of 2024, overseas component production capacity will grow by at least about 78% to 270GW relative to the beginning of 2023, which will change the previous competitive landscape in which Chinese components almost monopolized the market.

It is worth noting that, considering the various barriers to entry into the photovoltaic industry, such as the amount of capital investment and technical difficulty, the current overseas expansion plans are highly concentrated in the component link. Currently, there are only a few plans to expand battery production, but they are not keeping up with the demand for components.

The supply of upstream materials such as silicon and silicon wafers is also limited. Silicon is the primary material used in the photovoltaic industry. For these newly entered battery and component factories, it is still difficult to completely get rid of the dependence on the supply chain of China’s solar energy industry in the short term of two to three years, and the time for capacity to land remains to be observed due to local costs, approval processes, policies, etc. Innovations in the photovoltaic industry enhance solar cell performance.

According to the August 2023 report of SEIA (American Photovoltaic Industry Association), at present, the new or expanded capacity of photovoltaics in the United States is mainly based on claims, and only a small number of photovoltaic components and a very small number of inverter capacity have been invested in construction.

The photovoltaic industry faces four major challenges

While China’s photovoltaic industry continues to maintain rapid growth, it is still necessary to be vigilant about problems such as product quality and false labeling of component power caused by technological iteration. The trade protection situation remains severe and complex, the non-technical cost of photovoltaic power generation has not been effectively reduced, and the uncertainty of economic benefits is increasing.

Product quality issues have resurfaced. Issues such as arbitrary release of battery efficiency and false labeling of component power need to be taken seriously. With the iteration and upgrading of photovoltaic technology, product reliability issues caused by the application of new technologies and new materials have increased.

On the component side, with the promotion and application of new technologies, the phenomenon of false labeling of power has risen due to the inconsistency of technology and standards. According to the survey of the China National Institute of Metrology, the false high value of the component power data calibration by third-party institutions is as high as 14W.

The trade protection situation remains severe and complex. It is mainly reflected in the continuous strengthening of existing trade barriers and the establishment of new trade barriers by some countries.

The non-technical cost of photovoltaic power generation has not been effectively reduced. Although the overall price of crystalline silicon components has dropped significantly, the non-technical cost of downstream photovoltaic power station development and construction in the industry remains at a high level. The dividend of component price reduction has not been effectively converted into an increase in project yield to a certain extent. New and old problems represented by mandatory storage, mandatory photovoltaic industry support, high land rent, and delayed repurchase of transmission lines and power grids have not been effectively solved, and some problems tend to intensify, among which the mandatory storage problem is the most significant.

The uncertainty of the economic benefits of photovoltaic power generation projects is increasing. First, with the rapid increase in the proportion of new energy installed capacity, the proportion of photovoltaic power generation participating in power market transactions is increasing rapidly. Second, the expenditure on coal-fired power capacity electricity prices may increase the cost of photovoltaic power generation. Third, the peak photovoltaic power generation period is adjusted to the low electricity price period, which has a huge impact on the distributed photovoltaic power stations of industry and commerce that self-generate and use the surplus electricity to the grid.

photovoltaic industry Give full play to the role of the market in promoting

Based on the current situation and challenges faced by the photovoltaic industry, the research team proposed countermeasures and suggestions such as strengthening industry supervision and self-discipline, strengthening trade response work, deepening international production capacity cooperation, and optimizing the development environment of photovoltaic power generation. The photovoltaic industry focuses on sustainable energy solutions.

Strengthen industry supervision and self-discipline. Strengthen the construction of empirical capacity, guide enterprises to put quality first, and verify the reliability of new technologies and materials through repeated empirical verification. Further, strengthen supervision and increase the crackdown on the false high calibration of component power.

Combined with the implementation of the “Standard Conditions for Photovoltaic Manufacturing Industry”, product quality and component power calibration issues will be used as an important reference for whether to be included in the list. Call on enterprises in the industry to focus on technological innovation, cost reduction, and efficiency improvement, not be tempted by short-term interests, and adhere to long-term; third-party testing agencies should adhere to professional ethics. Give full play to the role of industry associations, organize the signing of industry self-discipline conventions, and guide the development of industry self-discipline.

Strengthen trade response work. It is recommended that relevant departments such as commerce, industry and information technology, and foreign affairs take the lead in setting up special teams, formulate relevant plans, form joint forces at the government level, strengthen communication and coordination with governments around the world, and use China’s voice in global institutions to exert influence and avoid other countries or institutions following suit.

Deepen international capacity cooperation. Guide enterprises to actively relocate part of their production capacity to neutral countries such as Southeast Asia, strengthen the interest binding of the photovoltaic industry by gradually increasing the proportion of local suppliers and enhance the voice of China’s photovoltaic industry.

Optimize the development environment of photovoltaic power generation. Improve photovoltaic land use policies and further clarify the land use standards for photovoltaic composite projects such as cultivated land, forest land, and water surface. Follow the principle of building a unified national market, increase supervision on the monopoly of the distributed photovoltaic market and the supporting aspects of the photovoltaic industry, and reduce the cost of project construction.

Continue to expand China’s domestic market, solve the institutional and mechanism obstacles faced in market development, including promoting the consumption of photovoltaic power generation, improving energy storage business models and market mechanisms, and opening up distributed photovoltaic power generation “wall-to-wall electricity sales”, and give full play to the market’s role in promoting the development of the photovoltaic manufacturing industry. Strengthen training for photovoltaic power generation companies to participate in electricity market transactions, cultivate new business forms and models to serve power generation companies, optimize policies, and fully reflect the green added value attributes of photovoltaic power generation.

The photovoltaic industry is advancing efficiency through improved solar cell technologies
The photovoltaic industry is advancing efficiency through improved solar cell technologies