Solar Production Costs In China Falls By 42% In 2023: Wood Mackenzie

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A latest report states that the cost of producing solar modules in China has dropped by 42% in the last 12 months to US$0.15 per watt (/W). This gave manufacturers in the country cost advantage over international rivals according to the New Horizons report from Wood Mackenzie.

The report looks at ‘Five low-carbon tech trends worth tracking’ at five key charts and identifies some key underlying trends across the low-carbon landscape.

Alongside the fall in Chinese solar hardware costs the report looks at the rise of renewable energy, the efforts being made to diversify battery raw materials supply, the progress of carbon capture and storage and the growth of domestic heat pumps.
“With COP28 reaching its conclusion, these five charts highlight the vital importance of all facets of the energy transition process,” says co-author Steven Knell, Vice President, Power & Renewables. “The charts [in the report] show the progress that is being made, but also underline how much still needs to be done.”

The report also states that policy is widening to support the build-out of domestic supply chains for low-carbon technologies. It emphasizes on the need to develop new sources of critical minerals to reduce global dependence on China. While in some cases such as Chinese solar module production, costs are coming down, in others they will remain high.

“The charts in the report indicate the global scale of the energy transition process and identifies some of the challenges,” says co-author Malcolm Forbes-Cable, vice president, ‘Upstream and Carbon Management Consulting’. “With US$70 billion needed to be invested in global CCUS [Carbon Capture, Utilisation and Storage] transport and sequestration infrastructure before 2030, the financial implications alone will require global solutions.”

Solar Module Prices By Location

Report mentions that China commands 80% of global capacity as reflected in soaring domestic installations. It adds that, this year, its domestic solar additions will be double those of the US and the EU combined. 

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The renewables success story reportedly continues to gather pace, led by the rapid growth of wind and solar. It adds that, by 2050, they will account for more than 50% of the global power supply. The last decade has seen a transformation in power generation, with renewables delivering low-cost power at scale.

Lithium and cobalt are compelling examples of the potential for a redistribution of the supply base. Th report states that, due to price signals that are driving new investments and expanded capacity, the future value chains for base metals and battery raw materials will be both deeper and broader.

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“The booming heat pump sector in Europe as further evidence that the shift to low-carbon alternatives across all sectors is gathering pace” states the report. It adds that, “Year-on-year growth has been in excess of 30%, while connections of air- and ground-source heat pumps are breaking records.” the report adds.

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