
Chinese-manufactured solar photovoltaic (PV) panels are piling up in European warehouses, with approximately 40 gigawatts-direct current* (GWdc) of capacity currently in storage – the same amount installed across the continent in 2022.
These solar panels in storage are worth about €7 billion and could generate enough electricity to power 20 million homes per year. The build-up is only set to grow this year, with Rystad Energy forecasting 100 GWdc of solar capacity in storage by the end of 2023.
Europe’s spending on solar imports has almost quadrupled in the last five years, surging from €5.5 billion in 2018 to more than €20 billion last year, while the supply source has become increasingly concentrated.
An overwhelming €18.5 billion, equal to 91 per cent of all PV import expenditure, was spent on Chinese products, as volatile panel prices impacted buying decisions. A critical shortage of solar-grade polysilicon – a crucial raw material in manufacturing PV modules – in 2021 and 2022, coupled with rising demand for installed solar PV, contributed to soaring panel prices worldwide.
As China dominates both the production and processing of polysilicon into PV modules, Chinese manufacturers have been increasingly able to undercut the competition on price. Today, panels made in China often cost as little as two-thirds of European-manufactured capacity.
Market watchers might think that the healthy inventory levels could signal an import slowdown on the horizon, but the first few months of 2023 tell a different story.
Imports in January were 17 per cent higher compared to 2022, with February up 22 per cent, March surging 51 per cent, April up 16 per cent, and May growing 6 per cent over last year.
If current import levels continue, 2023 will be a record-breaking year for imports and inventory. Annual imports look set to hit 120 GWdc, far surpassing expected capacity installations of 63 GWdc.
Rystad Energy senior supply chain analyst Marius Mordal Bakke said: “European countries are desperate to get their hands on affordable solar infrastructure to advance their renewable energy targets, decarbonise and avoid paying elevated prices for new capacity.
“Although efforts are underway to build a reliable solar supply chain in Europe, the need for panels now means leaders cannot wait until 2025 or later to buy European.”
*Solar panels produce direct current electricity, which then must go through an inverter to convert into alternating current before the power enters the grid. There is a degree of power lost in the inversion process, which is factored into our research.