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Global Solar Energy Manufacturing Sector Reaches 50% Utilization Rate, IEA Reports

The International Energy Agency (IEA) states that global solar cell and module manufacturing capacity grew by around 550 GW in 2023. It reports that around 80% of the global photovoltaic manufacturing industry is currently concentrated in China, while that India and the United States have a 5% quota each. Europe barely represents 1%.

The global solar cell and module manufacturing industry is currently operating at a utilization rate of approximately 50%, according to the IEA's Advancing Clean Technology Manufacturing report. Besides, global investments in new solar factories amounted to $80 billion in 2023 alone, that is, twice as much as in 2022.


The Chinese solar industry accounted for about 95% of global investments in wafer production capacity last year, 96% of investment in polysilicon production facilities and 83% of module factories. According to the IEA, about 440 GW of the 500 GW of total cell and module capacity were deployed worldwide last year.


“Current photovoltaic solar cell and module manufacturing capacity could now reach the level needed to meet demand in 2030, according to the NZE scenario, six years ahead of schedule, with only minor shortfalls in the previous manufacturing phases of wafers and polysilicon,” the report states. “Although the sharp increase in supply has driven down module prices, supporting greater consumer acceptance, stocks of solar photovoltaic modules are growing and there are signs of reduction and postponement of planned capacity expansions, especially in China".


“The high geographic concentration of the entire solar PV supply chain is unlikely to change significantly based on announced projects, as China's share of capacity for modules, cells and wafers will decrease marginally and increase for polysilicon, until reaching close to 95% in 2030,” said the IEA.


It also presented data on the levelized cost of manufacturing, initial and operating costs, as well as national incentives for manufacturing. He said a 56GW solar module factory being built by JinkoSolar in China's Shanxi Comprehensive Reform Demonstration Zone is cheaper than national average values.


“Although this is not an estimate of actual costs, it is estimated that the installation will cost $7.8 billion, that is, $140/kW for the manufacturing of solar photovoltaic modules in a chain, compared to $185/kW on average national in China,” says the IEA.

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