Spring 2023 Solar Industry Update

Chinese Market Update Sources: BloombergNEF, China Will Produce 430 GW of Modules in 2023 Industry Says, 3/8/23; BloombergNEF, China's Rooftops Are Becoming the key to the World's Solar Boom, 3/31/23; China NEA (1/18/23); PV Tech (3/28/23, 3/30/23). • Although China has continued to deploy PV rapidly, headwinds include high supply chain prices, constraints on land development, and lack of transmission from remote PV projects to densely populated areas. • One solution is more rooftop PV-for the second year, China installed more distributed PV than utility-scale PV in 2022. ― Distributed PV now constitutes about 40% of total PV capacity. - The 50 GWac of distributed PV installed in 2022 eclipsed the total renewable energy installed by any other country; about 1 of every 4 modules installed globally in 2022 was on a Chinese rooftop. • - Distributed PV surged in 2021 and 2022 owing to subsidies, lower sensitivity to module price, high electricity rates charged to businesses along with power outages and pressure to decarbonize, and a bulk-buying program for local governments. Challenges going forward include strains from excess PV generation on distribution grids-which is stimulating time-of-use rate structures-expiration of national subsidies in 2021, and higher costs due to requiring storage paired with PV in most provinces. - Another solution is funneling utility-scale PV onto low-value lands-the Chinese government is promoting deployment in desert areas and oil and coal fields while discouraging deployment on farmlands and areas with ecological or cultural value. NREL 10

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