As Europe strives to develop local solar module production capacity, developers cannot afford to wait until 2025 or later to secure the supply they need. As a result, they are increasingly stocking up their warehouses with much cheaper Chinese panels. Around 40 GW DC of Chinese PV panels, worth €7 billion, are currently hoarded in European warehouses, and this number is expected to grow to approximately 100 GW DC by the end of 2023.
The analysts project that European imports of Chinese panels will reach 120 GW DC in 2023, with a 38% annual increase compared to the continent's expected installation of 63 GW DC this year. This indicates a gap of 57.4 GW DC between imports and installations. The trend has been steadily growing over the years, with European imports of Chinese modules increasing by 112% from 2021 to 2022, reaching about 87 GW DC in 2022. The Netherlands alone received 45 GW DC of these panels in 2022, more than ten times its total installations that year.
Despite efforts to build a reliable solar supply chain in Europe, the demand for panels is urgent, and European countries are eager to access affordable solar infrastructure to achieve their renewable energy targets and decarbonization goals. Challenges such as labor shortages and material delays in Europe have further fueled the overstocking situation, which is expected to persist until 2025. However, this oversupply in the market may prevent any significant price increases.
While there may be concerns about the declining interest from European buyers in stockpiled products in the future due to technological transitions and incentives for purchasing European-manufactured panels, this scenario is not likely to occur in the short term until Europe advances its manufacturing capabilities.
On the other hand, Chinese module makers have limited alternatives to Europe for large shipments. The US and India have imposed protection measures that make it difficult for Chinese module suppliers to enter their markets. Despite growing demand in China, it is not sufficient to absorb all the solar panels produced in China, leading to Europe continuing to be flooded with Chinese modules and PV products, resulting in growing warehouse piles and declining prices.
From Taiyang News