According to a recent consultancy report Wood Mackenzie, China is consolidating itself as the global epicenter of solar equipment production, expected to hold more than 80% of global polysilicon, cell and module manufacturing capacity by 2026. This expansive momentum is driven by massive investments exceeding US$ 130 billion in 2023 alone, combined with technological improvements and government support.
According to the consultancy, China will continue to lead the global solar industry, driven by cutting-edge technology and competitive costs. Although some foreign regions have implemented favorable policies to develop their own production capabilities, the associated costs still cannot compete with Chinese production. For example, according to the report, a solar module produced in China is 50% cheaper than in Europe and 65% cheaper than in the US.
China is expected to maintain its technological edge with plans to build more than 1,000 GW of N-type cell capacity, significantly surpassing the production capacity of the rest of the world. Meanwhile, India is emerging as the second largest module production region, boosted by substantial government incentives.
However, the report also points to growing challenges, including concerns about oversupply and the obsolescence of certain production lines. Consequently, more than 70 GW of production capacity in China was recently shut down or suspended, indicating a challenging period for the Asian country's solar module manufacturers. To adapt to this scenario, some manufacturers may have to accept orders at a loss, reduce capacity or even close operations.
