Solar Industry Set to Slide into 592 GW of Module Installations by 2024

According to a recent report by BloombergNEF, solar panel installations are expected to reach 592 GW by the end of 2024, marking a 33% increase from 2023. The report, titled "3Q 2024 Global PV Market Outlook," attributes this growth to the falling costs of solar modules, which are driving market expansion. However, the competitive pricing is also placing pressure on manufacturers to maintain their market share.

Global Solar Market Growth Trends

The report highlights a 1% quarter-by-quarter increase across 28 major global markets. Countries like Pakistan, Saudi Arabia, and India are leading the growth, while Japan and South Africa are experiencing noticeable declines. In contrast, well-established solar markets continue to demonstrate steady progress. This consistent rise is seen as part of a broader trend in the renewable energy industry.

Long-Term Projections and the Impact of Polysilicon Production

BloombergNEF forecasts that annual solar module installations will continue to rise, reaching 996 GW by 2035. However, the report also downgraded its polysilicon production forecast for 2024, reducing it to 1.96 million metric tons—sufficient for building 900 GW of solar modules. This reduction from the previous estimate of 2.2 million tons is due to manufacturers cutting back production in response to oversupply and low prices.

Pressure on Manufacturers Due to Low Solar Module Prices

Jenny Chase, lead solar analyst at BloombergNEF, explained that manufacturers are scaling back production because the current market price for polysilicon has fallen to $4.9/kg—below the cost of production for most companies. Additionally, solar module prices have dropped to a record low of $0.096/W. As a result, many manufacturers are expected to face financial losses in 2024, with some unlikely to survive the challenging market conditions.

Overcapacity and Cost-Cutting Measures Across the Supply Chain

The report identifies overcapacity in the solar supply chain as the key factor behind the continued decline in prices. Manufacturers at all levels, from polysilicon to modules, are grappling with financial difficulties. Many have implemented cost-cutting measures such as pay cuts, workforce reductions, and delayed payments to suppliers in an effort to stay afloat.

As 2024 approaches, BloombergNEF predicts further decreases in solar module prices, with panels using tunnel oxide passivated contact (TOPCon) technology expected to dip below $0.10/W in the free trade market.