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In 2022, European And American Photovoltaic Installed Capacity Will Diverge, And High Growth Is Expected To Be Achieved in 2023

Jan 02, 2023Leave a message

Maintain the industry "overweight" rating. From a global perspective, China, Europe, and the United States are the top three markets for photovoltaic demand. In 2022, European photovoltaic installations will be hot, while the US market will be cold due to trade frictions. As Europe accelerates its energy transformation and the U.S. trade margin is improving, it is optimistic that the demand for the industry will increase in 2023.

In 2022, the installed capacity in Europe exceeded expectations, and the high growth is expected to continue in 2023. SPE recently released a report stating that the newly installed photovoltaic capacity in Europe in 22 years is expected to reach a record 41.4GW, +47% year-on-year. We believe that the main reasons for the rapid growth of the European market include: 1) Geopolitical conflicts have accelerated the process of European energy independence; 2) Due to energy shortages, both natural gas and electricity prices have risen sharply; 3) European residents generally have higher electricity prices, and photovoltaics are more economical highlight. Looking forward to the future, in May 2022, the European Union released the "REPower EU" strategy to stimulate the accelerated deployment of photovoltaics in Europe. SPE predicts that the conservative/neutral/optimistic scenario of new installed capacity in Europe in 2023 will be 42.8 GW (+3%)/43.4 GW (+29%)/67.8GW (+64%) respectively.

In 2022, the installed capacity in the United States is lower than expected, and the potential demand in 2023 is strong. According to SEIA/Wood Mackenzie, the total installed capacity in the United States is expected to be only 18.6GW in 2022, a year-on-year -23%, of which the expected installed capacity of public utilities/households/industrial and commercial and communities are 10.3GW (-40%)/5.8GW (+37%) respectively %)/2.5GW (+3%). We believe that the main reason for the decline in installed capacity in the U.S. market in 2022 is that the U.S. market is affected by WRO, anti-circumvention investigations, and the UFLPA Act, resulting in poor module imports. Looking ahead to the new year, factors that will stimulate demand growth in the U.S. market in 2023 mainly include: 1) U.S. electricity prices continue to rise; 2) IRA Act tax credit policy stimulus; 3) Anti-circumvention investigation final exemption extension for 2 years; The UFLPA Act has been reviewed, but recently, companies that have temporarily detained photovoltaic modules have been released by the US Customs, and there are precedents for subsequent batches. To sum up, although the installed capacity in the United States in 2023 faces uncertainty, the potential demand is still very strong. SEIA/Wood Mackenzie expects the US to install about 28GW (+51%) in 2023.

From the perspective of the supply chain, the price of the industrial chain is going down, and we are optimistic about the market in 2023. From 2021 to 2022, the price of the industrial chain will rise, suppressing the demand for some downstream installations. As the price of the industrial chain falls, the price of downstream components and systems will fall, which will stimulate the global demand in 2023

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