China Module Exports Grow 112% to 37.2 GW In Jan-Mar 2022, Thanks To Europe, India

Export data from the China Customs compiled by Taiwan based researcher PV InfoLink shows that China exported 9.6 GW, 14.0 GW, and 13.6 GW of modules respectively in the first three months of the year, totaling 37.2 GW of export volume in the first quarter this year, a 112% of YoY increase. The numbers validate the claims by domestic manufacturers in India that developers have stockpiled modules ahead of the start of the new BCD (Basic Customs Duty) regime from April 1, 2022. Imported Modules will be subjected to a 40% duty, while cells face a 25% duty.

While Europe imported 16.7 GW of Chinese modules in the first quarter this year, a 145% growth over the same period last year India imported 8.1 GW of modules from China in the first quarter, a 429% marked increase on last year’s 1.5 GW, says the firm. However, demand from India is expected to slow down considerably going ahead, thanks to the stockpiling as well as fresh capacities backed by the hefty BCD protection.

However, the Asia Pacific is expected to remain the second largest destination for Chinese module exports, thanks to demand from other countries in the region.

Among other markets worldwide, Brazil, which imported modules worth 4.9 GW in the first quarter, making it the third largest destination for Chinese modules in the quarter. But even in Brazil, as grid fees kick in for renewable energy too from 2023, demand might not sustain for a long time. The US, a key market right up till 2021, remains a problem area for Chinese exporters thanks to the duties and pushback from the federal government to Chinese origin imports. Should issues be sorted out there, the US could easily pick up the slack from India and more actually.

While all this unfolded in the first quarter, it remains clear that elevated prices will not moderate anytime soon, as supply chain issues continue to dog the sector, and the wave of covid lockdowns in China since the past month  have an impact across all these importing markets too.

For India, where fresh capacity additions will be coming in faster from 2023 onwards, the challenge will be to control the prices of solar cells, where domestic capacity will take longer to ramp up. Backward integration beyond that to wafers and polysilicon levels is not expected to take share till 2024-25, when Reliance New Energy’s plants under manufacture will finally take shape.

With global solar capacity additions set to cross 200 GW and beyond consistently, the challenge to China’s dominance will be one of the key narratives to consider, as many key markets like the US, India and even Europe look to ramp up domestic manufacturing capacities too.