Author Corrine Lin
Updated February 17, 2023

Solar, among all renewable capacity additions, witnessed the strongest growth in 2022, as driven by energy crisis and Russia’s invasion of Ukraine. InfoLink Consulting’s calculation shows that the global solar demand reached 278 GW last year, an increase of 100 GW or 56% on 2021’s 178 GW.

This year is expected to see bigger changes in supply and demand. InfoLink predicts three major trends:

Demand growth slows gradually

In 2022, China and Europe each hit 90 GW of module demand, underpinning global demand growth of the year. Amid the pessimistic economic outlook this year saw European demand already weakening from the fourth quarter of 2022. China and Europe will remain the largest PV markets this year, each contributing more than one third of the share, bringing the global total to 338-398 GW. Yet, as last year’s total demand has lifted markedly, this year is expected to see lower annual growth rate compared with last year.

Looking at demand by quarter, the first quarter is usually the low season, as India and Japan finished installation rush before the end of fiscal year. However, as module prices dropped between the end of 2022 and the first quarter of this year, demand from end users may start initiating in the second quarter. Europe and the U.S.’ traditional high season usually falls upon the third quarter, while the Chinese market will begin installation rush in the fourth quarter. Overall, demand in the second half is estimated to take up 57% of the yearly demand. 

Graph: Forecast for global demand
230217_InfoLink Consulting Database_en_1
Source: InfoLink Consulting Database

Profits redistributed amid falling prices

Booming solar demand led to rapid expansion across the supply chain. Last year, effective polysilicon, wafer, cell, and module capacity each reached beyond 500 GW, sufficient to meet this year’s projected demand (less than 400 GW). Moreover, each segment will add at least 200 GW of new capacity this year, turning the supply chain from shortages to surplus and lead to price war.

Driven by last year’s fat profits, existing polysilicon expansion projects will be materialized this year, with production increasing month over month and becoming surplus eventually. Although polysilicon prices bottomed out and rebounded in the first quarter, prices will return to normality after this short-term movement. In general, price turbulence will occur due to factory maintenance and supply changes, but prices will decline month over month. Wafer prices will move along with polysilicon ones, with bargaining power shifting to cell and module segments. 

In the module segment, the four largest vertically integrated companies shipped similar volume in 2022, all exceeded 40 GW. Other manufacturers whose module capacity was modest, such as Tongwei and DAS Solar, are scaling up to enter the top 10 list. With slowing annual demand growth rate and rapid expansion, the competition grew fiercer, resulting in rapid decline in module prices between the end of 2022 and the first quarter of this year. Overall, prices will average at around USD 0.21/W this year.

N-type rapidly grabbing market share

Last year, more than 80 GW of TOPCon capacity was materialized and 16 GW was shipped, while that of HJT reached 13 GW and 3 GW, respectively. This indicates that most leading manufacturers chose TOPCon over HJT, for the former can be upgraded from PERC and that its costs can be brought down to near PERC. The rapidly growing n-type capacity will push up its market share; it’s estimated that around 20 GW of n-type products were shipped last year, accounting for more than 7% of the share.

With n-type becoming the next mainstream technique, large manufacturers are investing in the next-generation cell technologies. So far, announced capacity expansion plans for high-efficiency cell techniques have exceeded 1,100 GW. InfoLink’s calculation suggests nameplate TOPCon capacity may surpass 400 GW by the end of the year, replacing PERC capacity at a pace faster than expected. 2023 will see the market share of TOPCon exceeding 25%, marking the beginning of the era of next-generation cell technology.

While TOPCon capacity and production will both grow markedly this year, HJT and back-contact cell capacity and production will also increase continuously. HJT is likely to ship at least 10 GW this year, while leading Chinese manufacturers have commissioned back-contact cell expansion projects one after another. Back-contact technique is used to be dominated by Maxeon, but Chinese manufacturers’ back-contact cell and module shipment is now growing rapidly, potentially hitting 15 GW this year.

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