Solar panels installed on top of a apartment building. Representational image
| Photo Credit: MURALI KUMAR K / The Hindu

By the end of 2024, global solar manufacturing capacity is likely to reach over 1,100 GW, far exceeding the demand for photovoltaic panels. The sector experienced significant growth in 2023, with solar cell, wafers and modules capacity nearly doubling in comparison with the previous year. However, this led to a market oversupply that brought down module prices by more than a half and resulting in negative margins for manufacturers in 2024, according to the World Solar Market Report 2024 that was made public at the International Solar Alliance (ISA) conclave here on Tuesday.

“Due to these market pressures, global supply chain investments are expected to slow, with the anticipated capacity for 2030 expected to be lower than anticipated (in 2023). China will continue to dominate solar photovoltaic manufacturing through 2030, holding over 80% of the global capacity across all photovoltaic segments. The centralisation of the solar PV supply chain, while efficient, presents risks that could hinder renewable energy advancements. To counteract the vulnerabilities of a centralised supply chain, the industry is shifting towards diversification, leveraging technological advancements, and enacting supportive policies to build a more resilient system,” the report noted.

Over the last two decades, global solar capacity rose from 1.22 GW (gigawatt) in 2000 to 1,418.97 GW in 2023 — or a 40% annual growth rate. In 2023 alone, 345.83 GW of solar power was added, accounting for three-quarters of all new renewable capacity worldwide.

As of 2023, China holds 43% (609 GW) of the cumulative capacity globally, underscoring its position as the world’s leading solar energy producer. The United States was the next biggest country contributing 10% (137.73 GW). Japan, Germany, and India each captured between 5-6% share.

“In a week, the world leaders will convene in Azerbaijan under the aegis of COP29 with two guiding goals: agree to transition away from fossil fuels, triple renewable power and double energy efficiency by 2030. Both of these goals can be built on the foundations of efficient and clean technologies, hence underlining the importance of today’s proceedings,” Ajay Mathur, Director General, ISA said in a statement.