China saves its solar industry with installation record of 260 GW

Chart of the top ten PV markets in 2023, forecast contained in the Polysilicon Market Outlook 2027
China set up a new solar installation record of 260 GW (DC) in 2023, exceeding the forecast of 235 GW from Bernreuter Research by 10.6% – Chart/Image: Bernreuter Research

China’s solar market once again served as a backstop for the domestic photovoltaic (PV) industry, which has built up massive overcapacity. The country set up a new installation record of 260 GW (DC) in 2023.

China deployed solar power plants and distributed PV systems with a total alternating-current (AC) power of 216.88 gigawatts (GWAC) in 2023, the National Energy Administration announced today. This corresponds to a direct-current (DC) solar module power of 260 GW, based on an average DC/AC factor of 1.2.

After 105 GWDC in 2022, installations soared by 148% year over year. In December alone, 63.5 GWDC were installed – more than China achieved in the whole year 2021.

With this new installation record, the domestic market once again served as a backstop for the Chinese PV industry, which has built up massive overcapacity. According to the China Photovoltaic Industry Association (CPIA), the solar module production capacity reached 1,003 GW at the end of 2023; across the PV value chain, the solar module sector has the highest rate of overcapacity. For comparison: Bernreuter Research estimates the global solar module output at around 550 GW and global PV installations at 450 GW in 2023.

Forecasts from CPIA, Bloomberg and S&P Global too conservative

China’s huge installation volume was already foreseeable after the country deployed 94 GWDC in the first half of the year and the monthly installation rate climbed further from 20.65 GWDC in June to 22.5 GWDC in July. Nevertheless, CPIA predicted annual installations of only 120 GWAC to 140 GWAC (144 GWDC to 168 GWDC) in July. Bloomberg New Energy Finance forecasted only 152 GWDC one week later, S&P Global (formerly IHS Markit) only 170 GWDC in September. Did the two big market researchers rely too much on CPIA’s conservative prediction?

At Bernreuter Research, we internally assumed an annual volume of 250 GWDC in the summer; after weaker installations in August and September, however, we reduced the forecast value to 235 GWDC (see chart above) when we released our Polysilicon Market Outlook 2027 report in November. Due to the unprecedented installation rush in December, the final result of 260 GWDC even outpaced our original projection.

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