Made in China, The Future of Solar

 

Opening the door to massive growth

 

by Caris Chan, Market Director, EKO China

 

The solar and renewable energy industries in China are already showing healthy signs of recovery following the height of the COVID pandemic. With the rapid growth of PV projects at home and abroad, the future of solar is truly being 'made' in China.

China was the first country to pass 100 GW of cumulative installed PV capacity in 2017, and in 2019 generated over 220,000 GWh of electricity from solar power; an increase of 26.5% over the previous year[1]. Cumulative solar capacity reached 223 GW by the end of September 2020[2] and, despite the pandemic, China remains on course to add 34-38 GW in 2020[3].

Meanwhile, the International Energy Agency (IEA) is predicting that China will meet a target growth average of 35-44 GW annually from 2021 to 2025; securing China's position as the world's largest market for both photovoltaics and solar thermal energy, despite strong growth and projected investment in countries such as India and the US.

This growth is driven in part by the increasing affordability of solar PV versus polluting coal or gas-fired power plants; and its growth that China stands ready to support globally, through the export of cost-competitive, high-quality, and innovative PV modules.

 

Solar power keeps getting cheaper

 

The IEA's World Energy Outlook 2020[4] report firmly forecasts the continuing growth of renewables, as technologies mature and production costs decline, with solar power, in particular, predicted to become 'the new king of electricity'.

Supportive policies from national governments, keener than ever to secure, develop or strengthen their energy independence, are encouraging cheap access to capital; expanding the appeal of Solar PV, and deepening a growing cost divide versus fossil fuels in most countries, and solar projects now offer some of the lowest-cost electricity ever seen.

The report explores several dynamic scenarios based on available data while attempting to account for the economic and social impacts of the pandemic. One of these, the 'Stated Policies Scenario' (STEPS) reflects announced policy intentions and targets globally and predicts that renewables will meet 80% of global electricity demand growth over the next decade. In this case, while hydropower remains the largest single source of renewable energy, solar is the primary source of growth, followed by on and offshore wind.

 

Increasing investment & manufacturing 

 

Whichever scenario plays out, China is well-positioned to benefit. Nationally, solar will inevitably account for a larger and larger proportion of the nation's energy mix while globally, falling costs could spark a new energy revolution; driving a rush for equipment and resources that China's manufacturers stand ready to serve.

Wood Mackenzie's Global solar PV market outlook update for Q3-2020 estimated that solar PV installations would hit 115 GWdc in 2020, with 39 GWdc predicted in China alone; an increase of 30% year-on-year, with more than two-thirds of that (27GWdc), installed in the second half of the year[5].

Meanwhile, the China Energy Investment Corp. (CEIC) has revealed plans to build 25 to 30 GW of solar PV capacity over the next five years with utility-scale PV projects built in deserts and coal mining areas, and also next to hydropower projects. CEIC is exploring opportunities in the distributed-generation segment and overseas PV markets as well. The state-run group is also helping the central government to formulate the renewable energy portion of its Fourteenth Five-Year Plan[6].

In manufacturing, 2019 saw the top 10 module manufacturers in the world shipping out 79 GW or 65.4% of the total global cumulative module deliveries. Remarkably, x8 of these manufacturers, Jinko Solar, JA Solar, Trina Solar Longi Solar, Risen Energy, Suntech, Astronergy and Talesun, are Chinese[7]. With many of these companies now launching ultra-high-power PV modules (500 W+ and 600 W+) on the global market, market share could continue to move towards China Inc.

At the same time, manufacturing capacity continues to expand across China and along the supply chain; to meet the growing demand for Polysilicon, Wafers, Cells, Modules, PV Glass, Inverters, and accessories.

Also, x4 of the top x10 ranking 'Engineering Procurement and Construction' (EPC) providers are Chinese with 'PowerChina', and 'Sungrow' holding the top 2 spots, respectively[8].

 

 

Together, these developments illustrate the return on China's investment in solar; an investment that continues to pay dividends at home, and for many Chinese companies, abroad; including 'Sungrow', which won an 800MW inverter supply deal in Qatar. Or 'JinkoSolar', which landed a supply contract for Europe's largest bifacial solar farm; and 'Longi', which delivers bifacial modules for a 101MW project near Chile's Atacama solar hotspot.

 

The 'Solar Rush' is on

 

"I see solar becoming the new king of the world's electricity markets. Based on today's policy settings, it is on track to set new records for deployment every year after 2022," said Dr Fatih Birol, the IEA Executive Director. "If governments and investors step up their clean energy efforts in line with our Sustainable Development Scenario, the growth of both solar and wind would be even more spectacular – and hugely encouraging for overcoming the world's climate challenge."[9]

For this bright future to succeed, its foundations must be built on data. While signs point to a 'solar rush' it can't, like the 'oil rush' that preceded it, succeed without careful planning, study, and a complex network of mechanisms, resources, and financing.

Simply put, solar must not fail, and won't; but it could be held back or delayed. With many countries around the world already experiencing the genuine impact of the climate crisis, any delay is unacceptable, and all nations must work together to ensure a sustainable 'solar rush' that benefits all.

At EKO, we build precision solar sensors, pyranometers, spectroradiometers, sun trackers and more. With over 90 years of Japanese reliability & precision in renewable energy, environmental science, and material analysis, EKO designed and built instruments are today deployed around the world, supporting environmental research and renewable energy projects through continuous innovation, industry-leading turn-key solutions, and an uncompromising commitment to quality.

 

Find out more about the class and industry-leading EKO sensors and solutions helping to drive the new 'Solar Rush'

 

 

 

[1] China Energy Portal, 2019 electricity & other energy statistics

https://chinaenergyportal.org/en/2019-electricity-other-energy-statistics-preliminary/

[2] Mercom India, China Adds 18.7 GW of Solar Capacity in First Nine Months of 2020

https://mercomindia.com/china-solar-capacity-first-nine-months/ 

[3] Mercom India, China Likely to Add 34-38 GW of Solar Capacity in 2020: AECEA

https://mercomindia.com/china-solar-capacity-aecea

[4] International Energy Agency, World Energy Outlook 2020

https://www.iea.org/reports/world-energy-outlook-2020

[5] Wood Mackenzie, Global solar PV market outlook update: Q3 2020

https://www.woodmac.com/reports/power-markets-global-solar-pv-market-outlook-update-q3-2020-442596/

[6] Energy Iceberg, China’s Solar Market: Renewable Investors’ Critical Battlefield

https://energyiceberg.com/china-solar-market-shift/#China_Energy_Investment_Corp_(CEIC)

[7] Solar Edition, Top 10 Module Manufacturers Market Share in the Global Solar Panel Module Market

https://solaredition.com/top-10-module-manufacturers-market-share-in-the-global-solar-panel-module-market/

[8] IHS Market, Reshuffling among top EPC players as new markets arise

https://ihsmarkit.com/research-analysis/reshuffling-among-top-epc-players-as-new-markets-arise.html

[9] ieefa.org, IEA’s Birol: Solar soon to be the ‘new king of the world’s electricity markets’

https://ieefa.org/ieas-birol-solar-soon-to-be-the-new-king-of-the-worlds-electricity-markets

 


 

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