According to the latest International Energy Agency’s (IEA) World Energy Outlook, manufacturing capacity for solar modules is rapidly growing and has the potential to surpass 1,200 GW per year by the end of this decade.

The report points out the potential emergence of a new clean energy economy driven by solar PV technology and electric vehicles (EVs). It notes that the investment in clean energy has experienced a 40% surge since 2020.

Solar Manufacturing’s Global Impact

Over the last decade, solar manufacturing has grown exponentially, driven by the increasing demand for clean energy. Investments in the pipeline are set to elevate global solar module manufacturing capacity from 640 GW in 2022 to over 1,200 GW by 2030.

The manufacturing of solar PV modules has expanded even faster than deployment, resulting in a drop in utilization rates from around 60% to under 40% in 2022, well below the healthy 70% level for a mature industry.

Despite the projected rise in solar PV deployment from 220 GW in 2022 to about 500 GW in 2030, the utilization rate remains under 40%. Optimizing solar manufacturing capacity offers a substantial opportunity to speed up solar PV deployment and energy transitions.

Solar manufacturing is currently highly concentrated in five countries, led by China, accounting for over 90% of global capacity. The other four are Vietnam (5% of the global market), India (3%), Malaysia (3%), and Thailand (2%). The next five leading solar manufacturers – the United States, Korea, Cambodia, Türkiye, and Chinese Taipei – each account for around 1% of the global total, as does the European Union.

Over 100 countries implemented solar PV projects in 2022, mostly relying on imported panels, with China being the primary exporter. Plans for additional capacity suggest that manufacturing will stay concentrated, emphasizing the importance of trade for many markets.

China plans to add another 500 GW of solar module manufacturing capacity, India aims to expand, Southeast Asia will remain an essential exporter, the U.S. is boosting production capacity, and the European Union plans to double its manufacturing.

By scaling up solar PV deployment, an additional 800 GW of solar PV could be deployed in 2030, equivalent to the NZE Scenario’s level.

According to another report from the IEA, global investments in clean energy could reach an unprecedented $1.8 trillion in 2023, but this must increase significantly to about $4.5 trillion annually by early 2030 to align with the NZE scenario.

The IEA said in June that global renewable capacity additions are set to soar by an unprecedented 107 GW to over 440 GW in 2023.