With the two major PV expos and rapid changes in the market landscape taking place during these two months, discussions at the Intersolar Europe 2023 centered around inventory, market demand, and price fluctuations.
The following paragraphs summarize three key market trends observed at this year’s Intersolar Europe.
Inventory piles up in Europe; signs of price drops are clear
In 2022, the industry was bullish towards the European market in 2023, expecting rapid growth in demand, given the bloc's stellar performance in 1Q23. However, inventory affects market demand. Adding to that, distribution prices tumble during May and June since distributors have more inventory on hand, intensifying the cautious market sentiment. After the SNEC, marked price declines across the supply chain affected purchases of non-China developers. Overall, European demand will increase but to a limited extent. The industry generally expects Europe to add 60-70 GW of installed PV capacity this year, and InfoLink peg module demand conservatively at 90-110GW.
Tumbled supply chain prices and inventory piled up in Europe resulted in delays in ground-mounted projects. In some parts of Europe, labor shortages and high temperatures also affect purchases. Demand from distributed generation projects weakens due to declines in module and electricity prices.
Due to rapid price decline across the supply chain, module prices currently sit at EUR 0.19-0.2/W (USD 0.20-0.22/W) on the European spot market. On the distribution market, distributed generation projects purchase modules at EUR 0.21-0.22/W (USD 0.23-0.24/W). During the Intersolar Europe this year, price quotes for the second half of the year came in at EUR 0.16-0.17/W (USD 0.17-0.18/W).
Local manufacturing still has a ways to go
Discussions on local manufacturing focus on module production. Details of incentive policies remain scant. With expensive labor force and electricity, tariffs on imported materials, and the higher costs of non-China BOMs, cost reduction persists as a huge challenge.
For now, few manufacturers confirmed expansion plans. Most of the equipment orders are for module production equipment. The growth of local manufacturing in Europe hinges on whether there is any supporting policy under the proposed legislations. Considering labor and production costs, manufacturers are likely to set up factories in neighboring countries outside of Europe.
Investigation of InfoLink found some of the existing module makers purchasing non-China materials, of which supply is relatively scarce, and prices higher. Chinese glass entered into the EU is subject to anti-dumping duty as high as 75.4%. As of the end of 2022, there are 5,300 MT/day of non-China glass production capacity, according to InfoLink's survey during the Intersolar Europe this year. The figure may reach 8,500 MT/day, theoretically providing for the production of 60 GW of glass-backsheet PERC modules or 46 GW of glass-glass ones.
Module exhibit highlights
The major difference between SNEC and Intersolar is that exhibitors at the latter are mostly module makers. This year’s Intersolar Europe saw the market adopting n-type and other novel products, while non-China manufacturers focus on modules with lower cell counts, black modules, and low-carbon modules. Some module makers indicated the emission factor on their products, and several of them claimed to have completed the Simplified Carbon Evaluation (ECS, Evaluation Carbone Simplifiée).
In addition to Tier-1 manufacturers, mid and small-scale module makers presented TOPCon, HJT, and xBC modules. Non-China module makers and mid and small-scale ones still rely on outsourced high-efficiency cells.
There were fewer equipment and raw material suppliers. Still, Fraunhofer and Fraunhofer introduced edge passivation technology, which passivates the edge of cells after slicing to compensate for the loss of efficiency.
Large format is the absolute mainstream. Nine Tier-1 module makers came to an initial agreement on module sizes before this year's Intersolar Europe. As a result, there were evidently fewer discussions on rectangular wafers during the event.
Several non-China companies showcased small-format products. Most companies exhibited samples of upgraded large-format products, such as Meyer Burger and 3Sun.
Overall, coming to the limelight this year are modules with lower cell counts, black modules, and low-carbon modules.
With the CBAM entering into force in the last quarter of this year, and regulatory institutions implementing relevant measures in 2024, a greener PV industry will remain a trending topic. As the EU gradually steps up supply chain requirements, the Europe market will gradually prioritize the low carbon footprint and eco-friendliness of PV products.
In the long run, the ambition of energy transition will continue driving demand in Europe. Under the REPowerEU, member countries aim to deploy over 320 GW of new PV capacity by 2025 and 600 GW by 2030, potentially boosting demand to increase by 20-30% per year.