Unicorn Solar provides a brief overview of the upstream and downstream sectors of the PV industry, intending to highlight what happened in 2023 and the first half of 2024. The first part includes manufacturing activities of the upstream sector of the PV industry, from feedstocks (metallurgical grade silicon (MG-Si), polysilicon, ingots, blocks/bricks, and wafers) to PV cells and modules.
The second part provides activities of the balance-of-system (BOS) sector, which include components (inverters, mounting structures, charge regulators, storage batteries, appliances, etc.), project development, and operation and maintenance (O&M).
In 2023, lowering price trends along the PV module value chain affected the demand and manufacturing capacity gap. The speed of manufacturing capacity expansion surpassed market growth, and the increase in module inventories also affected price levels.
The price of polysilicon dropped from 22.13 USD/kg at the end of 2022 to 7 USD/kg range by the end of June 2023, and it remained below 10 USD/kg after that. PV module prices were 11-12 US cents/W as of the end of December 2023. While concerns about rising project costs in 2022 have been resolved, PV module suppliers face lower margins and cost pressure.
Throughout the year, projects to increase manufacturing outside of China have been reported in the USA, India, and Europe. Due to the Inflation Reduction Act (IRA), the USA’s production capacity of PV solar modules will exceed 100 GW/ year in 2026 if no serious change occurs from the new Trump administration. Projects to manufacture inverters and trackers are also planned.
Due to the PLI, India’s solar module production capacity is expected to reach 60 GW/year by the end of 2025. Despite these projects, China remained the world’s largest producer along the PV supply chain. Further increases in manufacturing capacity in China were reported in 2023, while the Chinese production share increased in all the value chains.
In 2023, production capacity increased to 1,103 GW/year from 717 GW/year in 2022. The production capacity figures include the capacities of aging and idle facilities that are no longer competitive; consequently, the actual production capacity was about 700 GW to 800 GW/ year in 2023.
The speed of capacity enhancement is faster than the global PV market growth, so the gap between demand and supply was more comprehensive in 2023, and PV module prices remained lower. Current price levels are expected to continue if the gap is not bridged, and inventories are not cleared.
