- The US and European Union are seeing solar panels pile up amid a massive oversupply, the IEA says.
- This has slashed prices by nearly half in 2023, and prices are set to continue dropping.
- “Manufacturers are focusing on cost-cutting and innovation,” the International Energy Agency wrote.
The International Energy Agency has recently reported that there has been a significant oversupply of solar panels in the United States and the European Union. The oversupply is mainly due to the high manufacturing capacity. As per the report, the US and the EU have accumulated approximately 45 gigawatts and 90 gigawatts of solar panels, respectively. It is worth noting that this amount is twice the predicted installation for 2024.
The oversupply of solar panels has resulted in a decrease in prices of nearly 50% in the year 2023, and it is expected to continue in the upcoming years. The report highlights that the manufacturing pipeline predicts that the capacity will increase to over 1,100 GW and 1,300 GW by 2024 and 2028, respectively. However, the global manufacturing-utilization rates are expected to decline. The rates have already decreased by 60% in 2023, and it is projected that they will drop below 40% in the next four years.
Regarding the report, China is expected to account for 85% of the expansion of solar module manufacturing capacity by 2028. However, the expansion is not anticipated to be met with an increase in demand. This will result in lower prices and fierce competition among manufacturers. In such a competitive market, manufacturers are focusing on innovation and cost-cutting to survive. The report suggests that large, vertically integrated companies are expected to have an advantage as they can control costs across the entire value chain.
SOURCE: BUSINESS INSIDER