Chinese solar photovoltaic (PV) panels are piling up in European warehouses, with approximately 40GWdc of capacity currently in storage, according to Rystad Energy.
These solar panels in storage are worth about €7 billion and could generate enough electricity to power 20 million homes per year. The build-up is only set to grow this year, with Rystad Energy forecasting 100GWdc of solar capacity in storage by the end of 2023.
Europe’s spending on solar imports has almost quadrupled in the last five years, surging from €5.5 billion in 2018 to more than €20 billion last year, while the supply source has become increasingly concentrated.
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An overwhelming €18.5 billion, equal to 91% of all PV import expenditure, was spent on Chinese products, as volatile panel prices impacted buying decisions. A critical shortage of solar-grade polysilicon—a crucial raw material in manufacturing PV modules—in 2021 and 2022, coupled with rising demand for installed solar PV, contributed to soaring panel prices worldwide.
As China dominates both the production and processing of polysilicon into PV modules, Chinese manufacturers have been increasingly able to undercut the competition on price. Today, panels made in China often cost as little as two-thirds of European-manufactured capacity.
Market watchers might think that the healthy inventory levels could signal an import slowdown on the horizon, but the first few months of 2023 tell a different story. Imports in January were 17% higher compared to 2022, with February up 22%, March surging 51%, April up 16%, and May growing 6% over last year. If current import levels continue, 2023 will be a record-breaking year for imports and inventory. Annual imports look set to hit 120 GWdc, far surpassing expected capacity installations of 63 GWdc.
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“European countries are desperate to get their hands on affordable solar infrastructure to advance their renewable energy targets, decarbonise and avoid paying elevated prices for new capacity. Although efforts are underway to build a reliable solar supply chain in Europe, the need for panels now means leaders cannot wait until 2025 or later to buy European,” says Marius Mordal Bakke, senior supply chain analyst at Rystad Energy.
The imports are heading to several key destinations, including the Netherlands, Spain, Germany, Poland, France, Greece, Italy, and the UK. The Netherlands was the standout leader in Chinese PV imports in 2022, bringing in almost 45GWdc alone, more than 10 times the amount of panels installed domestically across the year. Spain, Germany and France also imported more panels from China than they installed from any source. Greece has a similar profile to the Netherlands but on a smaller scale, with the country installing the equivalent of only 15% of the capacity imported from China.
