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As of 2024, the industry has officially passed the inflection point, characterised by slower growth," the report said. The global solar market is still many times larger than it was a few years ago, but slower growth is normal as the industry matures." . "In this new era of PV growth, PV companies need to be more diligent and focused. Competition among suppliers will intensify and efficiency will be critical to maintaining profitability."
Wood Mackenzie said this new growth model is being driven by several key markets. The Chinese solar market is likely to see a slight decline in sales by 2024. While it will continue to be the world's largest market, it is expected to shrink because investment in grid infrastructure is out of sync with project growth due to changes in pricing arrangements for large-scale solar installations and growth in distributed PV installations is slowing.
Europe's PV growth rates for 2022 and 2023 are 38 per cent and 26 per cent, respectively, and are expected to grow at an average annual rate of 4 per cent over the next five years. The report cites rising retail prices as the energy crisis recedes, slower growth in distributed solar installations, and capacity constraints in the grid infrastructure as reasons for the slowdown.
The average growth rate in the U.S. reaches about 27 per cent between 2019 and 2023 and is expected to drop to 6 per cent between 2024 and 2028. However, Wood Mackenzie expects the Inflation Reduction Act to come into full effect in 2024. In addition, analysts predict that it will lead to more power plant-scale solar projects and benefits for distributed PV. In addition, U.S. module production will nearly triple by 2024, and is expected to reach 40 gigawatts of capacity by the end of this year.
The analyst firm also predicts that the solar industry will face "liquidation" in 2024. The market expansion is largely driven by China, whose module manufacturing capacity alone is nearly three times the global demand. This oversupply is pushing Chinese module prices to historic lows, and Wood Mackenzie says cheaper Chinese pv modules will challenge many countries' plans to build vertically integrated domestic solar supply chains.Wood Mackenzie predicts that many planned manufacturing facilities will not materialise, and that existing plants will be under pressure to stay in business due to declining utilisation rates.
"This is nothing new - the solar industry is known to be a notoriously difficult business. But the industry has also never been bigger. As global demand growth slows, manufacturers will need to innovate as much as ever to survive," the report said. (This article was compiled from pv-magazine)
