Global Solar PV Manufacturing Capacity Projected to Hit 1,100 GW by 2024 and 1,300 GW by 2028, Surpassing Demand

According to the latest “Renewables 2023: Analysis and Forecasts to 2028” report by the International Energy Agency (IEA), the global solar photovoltaic (PV) market is facing an unprecedented oversupply due to a rapid expansion in manufacturing capacity. This surge is set to push module prices to record lows and intensify competition within the industry.

In 2022, global solar PV manufacturing capacity saw a dramatic 80% increase, adding nearly 200 gigawatts (GW). This trend is expected to continue, with an anticipated addition of 330 GW in 2023, bringing the total capacity to almost 800 GW—triple that of 2021. The IEA forecasts that capacity will more than double the demand for installations in 2023, creating a significant supply glut that will persist, with projected capacity reaching over 1,100 GW in 2024 and 1,300 GW by 2028.

The report identifies polysilicon production as a critical bottleneck in the PV supply chain. A shortage in 2021, exacerbated by a fire at a major plant and lagging investments, led to a tripling in polysilicon prices, contributing to a spike in module prices. However, by 2023, production capacity in China for polysilicon will have tripled from 2021 levels, aligning global capacity with other manufacturing segments such as wafers, cells, and modules.

China continues to dominate the global PV manufacturing landscape, with significant capacity expansions planned through 2028. Chinese firms are expected to hold between 85% and 95% of the production market across different segments. This concentration in China is bolstered by dynamic global demand for clean energy, driven by energy security concerns and increasing clean energy goals in various countries.

Despite China’s dominance, other regions are also ramping up their PV manufacturing capabilities. In the United States, investment is being spurred by policy measures like the Inflation Reduction Act (IRA), while India is leveraging its Production-Linked Incentive scheme. Both countries are focusing on reducing their dependency on imports and enhancing domestic manufacturing capacity, which is expected to cover 35% of North America’s solar PV demand and significantly exceed local demand in India by 2028, opening up export opportunities.

Europe, however, is lagging behind due to insufficient policy support for domestic manufacturers and a lack of demand-side incentives. This has led to limited project announcements, with Türkiye expected to attract the majority of European investments due to its favorable manufacturing costs and local content incentives. By 2028, Europe is projected to achieve only 10% self-sufficiency in PV manufacturing, remaining the largest import market for PV products, primarily from China.

The oversupply situation has led to considerable stockpiling of modules, particularly in the European Union and the United States, where distributors are preparing for potential import restrictions and tariff changes. By the end of 2023, estimated module stockpiles reached 90 GW in the EU and 45 GW in the US—nearly double the expected installations for 2024.

Despite these challenges, the IEA report suggests that manufacturers can navigate this competitive market by focusing on cost-cutting and innovation. Companies that are vertically integrated are likely to have a competitive edge, controlling costs across the entire supply chain. Additionally, the adoption of advanced solar cell technologies like TOPCon is on the rise, although PERC cells continue to dominate the market.

As the global PV market evolves, the IEA underscores the importance of geographic diversification of manufacturing and the need for supportive policies to enhance local production capabilities, which, while initially more costly, contribute significantly to energy security and economic resilience.