Recent modelling by Rystad shows that new solar photovoltaic (PV) capacity in 2023 is expected to top 150 GW in China, almost doubling the 87 GW installed in 2022. Projections show that this significant acceleration is set to continue – with about 165 GW expected to be added in 2024 and 170 GW in 2025. This growth will see China’s cumulative solar PV capacity reach over 700 GW by 2024 and increase to close to 900 GW by the end of 2025, before topping 1 TW in 2026.

According to China’s National Energy Administration, 134.9bn CNY ($15.8bn) has been invested in solar PV construction during 1H2023. This is 3.4 times the investment put into thermal power during the same period and the highest among all power generation sources. As China continues to invest in renewable energy, proactive measures to address the challenges of solar intermittency have been taken by encouraging new utility-scale renewable projects to build associated storage, Rystad notes. Pumped hydro, for example, is developing fast in China to meet seasonal changes in energy demand. By June 2023, China had 49 GW of pumped hydro, which is expected to reach 64 GW by 2025 and over 120 GW by 2030.

‘China’s national programme to build out solar capacity, launched in June 2021, has led to a significant boost in large-scale projects. Although most distributed PV systems are installed on rooftops, not all of them are used for residential purposes. Around two-thirds of the distributed PV capacity in China is utilised by the commercial and industrial sectors and these projects can vary from tens to more than 100 MW,’ said Yicong Zhu, Senior Renewables and Power Analyst, Rystad Energy.

Utility-scale solar PV development – if it produces 10 MW or more of energy – has been concentrated in the north-west region of China where solar and land resources are abundant. Power demand centres are in the south and eastern regions, along the densely populated coast and where most of the industries are located. The nation has made efforts to construct and expand its high-voltage transmission networks to move renewable power from areas rich in resources to demand centres. However, there is limited land availability and costs are high in coastal regions.

Therefore, distributed solar energy has become a more viable alternative and the more populous provinces of China have experienced a notable increase in the advancement of such projects this year. Particularly, the provinces of Henan, Shandong, Hubei, Jiangsu and Zhejiang have all observed a surge in installations.

Among these provinces, Henan takes the lead, with 7.6 GW of new solar PV installations, of which 98% were distributed solar PV. Following closely is Shandong, with 6.8 GW of new installations. It, however, currently holds the highest installed solar PV capacity among the provinces, boasting a total of 49.5 GW, including 35.7 GW of distributed solar and 13.7 GW of utility-scale solar, according to Rystad. The province of Hebei takes second place in terms of installed solar PV capacity, with a cumulative of 41.7 GW, evenly divided between utility-scale and distributed solar PV installations.

China has set provincial-specific solar PV installation targets under its renewable energy plans across 26 provinces as part of its 14th five-year planning period. The goal is to install 443 GW of new capacity by the end of 2025.

China’s solar panel exports meet growing global demand
In other news, new analysis by Ember has found that exports of solar panels from China grew 34% in 1H2023. The study shows that 114 GW shipped worldwide, compared to 85 GW in the same period last year.

More than half of the solar modules exported from China in 1H2023 were destined for Europe (52.5%). The region also saw the greatest absolute growth worldwide, with exports from China up 47% year-on-year (+21 GW), reaching a total of 65 GW shipped in 1H2023, compared with 44 GW in the same period last year. Once installed, this new capacity could provide around 2% of Europe’s annual electricity demand, Ember estimates.

Brazil is the next biggest importer after Europe, importing 9.5 GW in 1H2023. However, the fastest growth is happening across Africa and the Middle East. South Africa saw the largest change in any country outside of Europe, importing 3.4 GW of solar panels from China in the first six months of 2023, an increase of 438% (+2.7 GW) compared to the same period last year. As a result, Africa was up 187% (+3.7 GW), the fastest-growing region, according to Ember.

With global manufacturing capacity expected to double again by the end of 2024 compared to the end of 2022, as other countries outside China also step-up domestic manufacturing, global supply of modules is not a bottleneck to accelerated solar growth. However, the gap between solar module exports and installed PV capacity is widening, which in part reflects a buildup of module stocks in warehouses and the challenges of ramping up the installation and grid integration of solar generation, the report notes.