The global expansion of solar energy
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Solar energy is emerging as the beacon of the global energy future, with significant progress seen internationally.
Netherlands: An Emerging Solarian PowerIn the Netherlands, solar power generation has seen remarkable growth, driven by a dramatic increase in installed capacity, reaching 18.8 GW by the end of 2022. The country of 17.6 million people is ahead of Germany and Belgium in terms of solar power per capita, with 1.1 kW per capita in 2022.
Key Growth Factors Two main drivers are fuelling this solar growth in the Netherlands: a net metering system for residences and small businesses, and the SDE+ tendering system for large power plants . These mechanisms encourage competition between solar PV and other renewable energy sources.
Challenges and OpportunitiesAlthough the Dutch solar market has room for further expansion, around 1.2 GW of projects face challenges in securing connections and sites . The Dutch government has also reduced the value-added tax for residential PV systems from 21% to 0% since January 2023, underlining its commitment to solar energy.
China: Undisputed Solar Giant |
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China continues to be the world's leading photovoltaic manufacturer , mass-producing solar panels and consolidating its position in the global market. With massive investments and "gigafactories," Chinese companies dominate the global production of polysilicon, silicon wafers, cells and modules.
Massive InvestmentsChinese companies such as Longi and JA Solar are announcing multi-billion yuan projects to expand their production capacity, aiming to meet growing global demand. China's exports of photovoltaic products exceeded $51.2 billion in 2022, with a year-on-year increase of more than 80%.
Objectives of Other Nations The United States, India, Europe and Japan are seeking to reduce their dependence on China in the solar sector. However, China remains the world leader, having understood early on that the photovoltaic market required a volume approach rather than high technology.
Global Solar Race: India and USA in the Running |
India: Grandiose Solar AmbitionsIndia is making a mark in the solar energy sector with ambitions that match its domestic demand and an eye on the global market. Through the PLI scheme, which is an initiative to boost domestic production by providing financial incentives to industries, including the solar sector, to enhance self-sufficiency and participation in the global market, India is targeting 110 GW of PV module capacity by 2026 , with significant production capacities for cells, ingots, and silicon.
Industrial Awakening India’s industrial revival in the solar sector stems from the PLI program, which encourages domestic production, reinforced by the ALMM list now excluding foreign manufacturers. The Indian market is growing rapidly, going from 18 GW to 38 GW of module production capacity between March 2022 and March 2023.
United States: IRA Solar Initiative |
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In the United States, the Biden administration’s American Reconciliation Initiative (ARI) is boosting investment in solar energy. Advanced manufacturing credits and incentives for renewable project developers are strengthening the U.S. photovoltaic sector.
In the United States, the Biden administration has launched the American Reconciliation Initiative (IRA), enshrined in the Infrastructure Investment and Jobs Act (IIJA), to catalyze investments in solar energy. Credits for advanced manufacturing and incentives for renewable project developers are contributing significantly to the growth and robustness of the U.S. photovoltaic sector.
Major ChangesThe IRA introduces credits to promote locally produced equipment, emphasizing the importance of domestically sourced components. By promoting the purchase of American equipment, this initiative aims to stimulate domestic production , requiring that 40% of equipment be manufactured in the United States for projects installed before 2025.
Europe in search of solar independence Europe, aware of the importance of solar energy, launches the Solar Photovoltaic Industry Alliance to ensure a diversified supply of solar modules. Despite stated ambitions, the EU faces challenges to avoid the relocation of projects.
European Objective: 30 GW Annual Supply of PanelsThe European Commission has officially launched the Solar Photovoltaic Industry Alliance, setting an ambitious target of sourcing 30 GW of European panels annually by 2025. However, there is still a risk that projects will be relocated to other regions, as illustrated by the cancellation of REC Solar's project in France.
Challenges and Perspectives Although plans for factory expansion have been announced, European companies face challenges to compete with China’s gigantic expansions. The European Commission’s Net Zero Industry Act (NZIA) could influence the relocation of strategic industries, but concrete measures remain in the hands of member states.
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American Initiatives in Favor of Solar Photovoltaics The United States, under the Biden administration, has passed the Investment Tax Credit (ITC) and the Infrastructure Investment and Jobs Act (IRA) to boost the solar PV industry. Two key provisions, advanced manufacturing credits and project developer incentives, are expected to propel the sector.
Advanced Manufacturing Process Credits (AMPC): Support for American EquipmentThe AMPC encourages the production of renewable energy equipment made in the United States . This tax incentive aims to strengthen the country's energy independence while supporting local employment.
Constraints and Opportunities for Developers Developers of renewable energy projects in the United States are incentivized to purchase American equipment, benefiting from an additional tax credit by meeting thresholds for domestically sourced components. The requirement to produce 40% of equipment in the United States by 2025 poses challenges but offers opportunities for sustainable growth.
Europe at the Crossroads of Energy |
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Europe, aware of climate issues, has embarked on an ambitious energy transition. However, challenges abound, and the path to energy independence is not without obstacles.
Solar Photovoltaic Industry Alliance: Objective 30 GW per Year In December 2022, the European Commission officially launched the Solar Photovoltaic Industry Alliance. Its objective: to develop a European solar ecosystem capable of securing and diversifying the supply of solar modules.
The Risks of Relocation Despite ambitious targets, Europe faces the risk of project relocation to the US or India. European projects, such as REC Solar in France, have been cancelled, highlighting the need for strong incentives to support the European solar industry.
Towards a Sustainable Energy Future India, with its investment program and ambition to be self-sufficient, is positioning itself as a major player in the solar market. Significant production capacities are envisaged, thus fueling the global growth of photovoltaic energy.
Storage Challenges for Post-2030 With increasingly ambitious energy targets, the issue of storage becomes crucial. Storage technologies must evolve to meet daily, weekly and inter-seasonal needs. The European Union is working on a revised directive and issues recommendations to develop sustainable and efficient storage solutions.
The Importance of France in the Energy Transition As the global energy landscape evolves, France occupies a strategic position. With its diversification of renewable energy sources, including solar energy, France is actively contributing to the reduction of carbon emissions and the transition to cleaner energy.
A Dynamic Solar Landscape and Challenges to Address |
