Module Exports to India from China Slide from 9.8 GW H1 2022 to 2.3 GW in H1 2023

As per think-tank Ember, module exports to India from China have seen noteworthy slide. India is the only country to see a large fall in imports from China. The study finds that module exports to India declined by 76% (-7.5 GW) year-on-year, down from 9.8 GW in the first half of 2022 to 2.3 GW in the same period this year. The downswing has come at a time when module exports from India have spiked, even as domestic solar installations have failed to pick up as they need to.

The Ember report states that solar cells, which are unassembled parts that make up solar panels, made up the remaining
10% of China’s solar exports by value ($2.5 bn) in H1 2023. The main export destinations for solar cells were Türkiye (33%), India (17%), Cambodia (15%), Thailand (10%) and South Korea (4%).

India’s Shift Towards Domestic Manufacturing

As per the study, the reduction on imports from China is because of the imposition of tariffs as India shifts away from imports to focus on building and utilising domestic manufacturing capacity. India’s domestic solar module manufacturing capacity has stepped up, the report indicates. There has also been a rise in the number of Chinese cells, which are then assembled locally into solar panels, with India now the second largest destination for exported solar cells after Türkiye.

The country has relaxed its import duty to partly resume Chinese solar imports, whilst increasing manufacturing capacity to become self-sufficient, leading to increase in domestic production.

Looking Ahead

The Ember study says that global solar PV manufacturing capacity is expected to double again and reach almost 1000 GW capacity per year in 2024. Most of the growth is still in China, although 70 GW per year of capacity will come online spread across the United States, Europe, India and other countries in Asia. At SaurEnergy, we have tracked potential capacity additions of over 90 GW in fact spread across these markets by 2025-26.

China’s solar manufacturing capacity is expected to almost double in the next year, from 504 GW per year at the end of 2022 to 931 GW per year at the end of 2023. Europe is aiming for 30 GW per year of manufacturing capacity by 2025. In the United States, the Inflation Reduction Act has spurred investment promises of 85 GW per year of solar panel manufacturing capacity. India aims to increase manufacturing capacity to 110 GW/year by 2026.

Further, as per the findings, imports of Chinese solar panels will continue to be important to the global electricity transition in the short term. Much of Europe’s demand for solar power is being met by China, but this reliance will be reduced as the region increases manufacturing capacity. The US has already cut Chinese imports to near-zero.

The report can be accessed here.