In our previous article, we have shown you why we believe solar energy is a solution to the current energy and climate crises. This week, we will take a closer look at the Solar Energy Outlook 2023.
SOLAR INDUSTRY OUTLOOK
2022 was a difficult year for many industries, including solar energy. The price increases in raw materials, production, and shipping have impacted the entire solar supply chain. However, at the end of 2022, we witnessed a decline in the price of both the materials and shipping freight.
Silicon prices are expected to keep dropping in 2023, following the new manufacturing capacities coming online. Clean Energy Associates forecasts a 23% price decrease by the end of 2023 with the addition of 500 GW of new production capacity.
There are also expansions in the production of ingots and wafers. The increase in silicon capacity will improve the competitiveness of the market and will enable mid-stream manufacturers to diversify their silicon sourcing.
Figure 1 – Eco Green Energy 1 GW PV modules factory
Many manufacturers are switching their production lines from PERC to TOPCon or increasing their TOPCon cells’ and modules’ production capacities. TOPCon modules can share the same machinery as PERC modules, which eases the development of this technology. The further increase in production capacity will help build a strong supply chain for this technology and decrease production costs. The total market share of TOPCon technology will increase in 2023.
Figure 2 – World market share of PERC / PERL / PERT / Topcon technology (Source: Crystalline Silicon (c-Si)-Based Tunnel Oxide Passivated Contact (TOPCon) Solar Cell)
SOLAR MARKET OUTLOOK
According to Bloomberg Intelligence, global solar energy demand may grow 20-30% in 2023, after a 40% rise in 2022. The LCOE (levelized cost of electricity) of a new solar capacity is similar to a new wind capacity but over 50% cheaper than a new coal-fired power station. And this cost is most likely to further decline in the future. That’s why many governments have adopted new policies to develop solar energy.
For instance, the European Commission has launched the REPowerEU plan, which aims to accelerate the clean energy transition in Europe. In addition to climatic issues, Europe also needs to move away from Russian gas. In 2023, the EU will need 60 GW of new solar capacity only to replace Russian gas. By 2030, the REPowerRU plan targets 600 GW of new solar installations.
Solar demand will also soar in the United States thanks to the Inflation Reduction Act of 2022. It will offer incentives and tax benefits to many Americans for the installation of solar systems.
Solar is also expected to grow in the Asia Pacific region with the installation of 240 GW of new solar energy capacity from 2023 to 2027.