China's photovoltaic (PV) equipment exports this year will far exceed the planned installation capacity in its destination markets, with the majority of the equipment exported to Europe.
According to third-party bills of lading data from Hanwen Information, China exported over $29 billion worth of hardware between January and July, corresponding to 124 GW of PV modules and 23 GW of solar cells. This total capacity of 147 GW is just shy of meeting the 150 GW global demand outside of China and the US for the year, markets that are not China's primary export destinations. A significant portion of this exported capacity is likely to become inventory.
Europe is the largest export destination, receiving 71 GW of PV modules in the first seven months of this year, accounting for 57% of China's total module exports. Based on Bloomberg New Energy Finance's forecast, this figure is already 14 GW higher than Europe's planned installation capacity for the entire year of 2023.
Most of this excess capacity, along with further exports to Europe between August and December, will ultimately become inventory. Some of this will supply the growing demand for plug-in balcony PV systems, off-grid applications, portable PV cells, and unregistered rooftop installations—figures not reflected in official data and therefore difficult to translate into national demand figures.
Similarly, according to Bloomberg New Energy Finance estimates, approximately 47GW of modules remained unsold in Europe by the end of 2022, as China exported a total of 90GW of modules, while the region's installed capacity was only 43GW. July 2023 exports to Europe amounted to $1.3 billion, a 37% decrease month-over-month. Compared to the record figures in the first half of the year, China's exports from August to December are likely to continue declining.
While Europe is the primary export destination for Chinese modules, 95% of China's cell exports go to non-European markets where module assembly lines are more common. The largest importers in 2023 were Turkey (accounting for 31% of global imports as of the end of July), India (20%), Cambodia (15%), and Thailand (10%).
Turkey imported 7.4GW of solar cells, primarily solar panels, while its installed capacity this year is projected to be only 2.2GW. Once these cells are assembled into modules, Turkey may export the excess capacity to other markets.
India imported 7.2GW of solar cells and modules in the first seven months of 2023. Bloomberg New Energy Finance projects that India's PV installed capacity will reach 15.9GW by the end of the year. Since April 2022, India has imposed import tariffs on Chinese-made modules exported to its domestic market, which has increased production by domestic module manufacturers and increased the amount of solar cells imported from China.
Export data shows that the share of solar cells in total PV equipment exports has increased since January 2022. Earlier Chinese PV export data could not be broken down by product category.
