Global solar manufacturing sector now at 50% utilization rate, says IEA

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. It said that global investments in new solar factories amounted to $80 billion in 2023 alone, which is two times more than in 2022.

The Chinese solar industry accounted for approximately 95% of global investments in wafer production capacity last year, 96% of investment in polysilicon production facilities, and 83% of module factories. The IEA said that around 440 GW of 500 GW of total cell and module capacity was deployed throughout the world last year.

“Existing manufacturing capacity for solar PV modules and cells could today achieve what is necessary to meet demand under the NZE Scenario in 2030 – six years ahead of schedule, with only modest gaps remaining for the upstream steps of wafer and polysilicon manufacturing,” the report noted. “While the sharp increase in supply has driven down module prices, supporting wider consumer uptake, stockpiles of solar PV modules are growing and there are signs of downscaling and postponements of planned capacity expansions, particularly in China.”

The agency said that around 80% of the world's PV manufacturing industry is currently concentrated in China, with India and the United States accounting for 5% each and Europe at just 1%.

“The high geographical concentration of the full solar PV supply chain is unlikely to change significantly on the basis of announced projects, with China’s share of capacity for modules, cells and wafers decreasing marginally and increasing for polysilicon, to reach close to 95% in 2030,” said the IEA.

It also presented data on levelized cost of manufacturing, upfront and operational costs, as well as national incentives for manufacturing. It said that a 56 GW solar module factory under construction by JinkoSolar in China's Shanxi Comprehensive Reform Demonstration Zone is cheaper than national average values.

“While estimates are not outturn costs, the facility is projected to come in at $7.8 billion, or $140/kW for full-chain solar PV manufacturing, compared with our national average figure of $185/kW for China,” said the IEA.

The report also includes data on global wind energy, electrolyzer production, and heat pump manufacturing.