At the beginning of 2023, European countries will gradually regard the development of renewable energy as part of their regional security strategy, among which photovoltaic is the most prominent. However, due to the over-optimistic market expectation of full-year PV demand in the first half of last year, a large number of purchases, coupled with the competition of Chinese manufacturers' sales prices, led to the accumulation of module inventories in the second half of last year, and the spot price of modules also increased from 0.0 per watt in January 2023$238 fell to 0US$13, down nearly 45%, reflecting the oversupply of the overall PV market.
Market overview and policy observation of major European countries.
Europe is the second largest PV market in the world and after China, with PV module demand of about 89GW in 2023 and is expected to increase to 97-115GW this year, with an overall growth rate of about 20%. Among them, Germany, Spain, Poland and Italy are the top four PV markets in Europe, and InfoLink estimates that the PV module demand of the above four countries this year is 17 for Germany5-19.5GW, Spain 115-12.5 GW, Poland 75-8.5GW as well as Italy 5-62GW, the total demand contract of the four countries accounts for 42% of the European market demand, so the following will observe the installation situation of the above four countries, the demand for photovoltaic modules this year, and policy developments.
Germany
According to statistics from the German Federal Network Agency (bundesnetzagentur), there will be 14 new additions in 2023The 26GW PV installed capacity exceeded the annual installation target, with the increase mainly coming from residential rooftop and balcony PV, reflecting the effectiveness of Germany's stimulus policies in boosting demand. By the end of 2023, Germany's cumulative installed capacity will reach 818GW, compared with the 215GW installed capacity target in 2030 is about 38%, and the average conversion must reach 19GW of new installed capacity per year. In terms of policy, Germany proposed a number of stimulus policies last year to stimulate the demand for distributed PV projects, and also allocated a budget of 4.1 billion euros to subsidize the production of local PV raw materials and modules, in an attempt to strengthen the production capacity of the local ** chain. However, in November last year, the German Constitutional Court ruled that the federal government had violated the debt brake by investing unused anti-epidemic debt funds into the green energy industry plan, resulting in a 60 billion euro budget frozen by the court, and the federal government faced a budget shortfall. In order to resolve the fiscal impasse, the federal government has cut the Climate and Transition (KTF) and PV subsidy budgets, which may affect PV subsidy spending and weaken the subsidy capacity to strengthen local PV capacity. However, the Federal Cabinet also passed the draft photovoltaic package (solarpaket) in August last year, which will be sent to the German Bundestag and the European Parliament for voting in February and March this year.
Spain
According to statistics from the Spanish power grid company Red Eléctrica, Spain will add about 47GW of PV installations, as of January this year, Spain's cumulative installed capacity has exceeded 25GW, compared to 76 GW in 2030The 4GW installed capacity target has been completed by nearly 33%, and the average annual increase needs to be at least 7The 4GW installed capacity is expected to meet the target as scheduled. Spain is less obvious than Germany in stimulating the demand for self-occupied residential PV, mainly based on public PV installations, through the Reconstruction, Transformation and Resilience Program (RTRP) to increase the PV capacity of public facilities, and through the Next Generation Funds (Next Generation Funds) to subsidize the installation of self-occupied residential capacity, according to statistics, public facilities currently account for 60% of the total PV installations; 27% in the industrial and commercial sector; Residential self-consumption accounts for 13%, however, Spain is a European leader in power purchase agreements (PPAs), which makes it easier to attract developers to invest, while large-scale projects continue to increase, but there are still some challenges to overcome, such as long project permit application times, low administrative efficiency and shortage of professional photovoltaic technology manpower, coupled with the fact that the installation of photovoltaics on local agricultural land may impact agricultural performance and affect the development of centralized projects. Overall, however, Spain remains one of the most promising markets in Europe, with demand expected to grow by 28-32% this year compared to last year.
Poland
According to statistics from the Polish Energy Regulatory Authority (Institute for Renewable Energy, IRE), a total of about 42GW of PV installations, as of November last year, Poland has accumulated nearly 164GW, 61% of the 27GW installation target in 2030, is the country with the highest PV installation target in Europe, with an average annual increase of at least 1The 6GW installation will be on schedule, and it is expected that Poland will meet the target ahead of schedule if the current installation rate is in place.
Poland's PV demand is growing steadily, driven by Poland's Energy Policy of Poland until 2040 (PEP2040), which makes it the country with the highest PV installation rate in Europe. As of the end of September last year, the number of distributed installed capacity below 50kW in Poland has exceeded 1.3 million, and about a quarter of households in the country have installed rooftop PV, and the responsible unit has also said that it will not rule out the possibility of expanding the subsidy budget in the future. At present, Poland also believes that there is great potential for the development of ground-based projects, and Donald Tusk, who is committed to increasing the proportion of green energy in Poland, became prime minister at the end of last year, and if he continues to propose a number of stimulus policies this year, it is expected to boost the PV demand in the Polish market, which is expected to grow by about 31% this year compared with last year.
Italy
The increase in distributed PV installations in 2023 is mainly due to the 2023 superbonus, which provides a 90% tax rate credit for installed PV users, which is significantly lower than the 110% superbonus tax reduction in 2022, but also successfully stimulates rooftop PV demand, according to statistics, about 47% of Italy's installed capacity in the first half of last year came from distributed projects. However, the 2023 superbonus tax rate credit will be reduced to 70% from this year, and observing the data on Italy's imports of Chinese PV modules, the fourth quarter of last year has dropped significantly compared with the first three quarters, with an average decrease of about 60% quarter-on-quarter, indicating that the tax rate reduction and reduction has indeed impacted the demand for distributed projects. Although Italy** announced a 50% extension of detrazione until the end of 2024 in 2023 to encourage households to install photovoltaic panels and energy storage systems, with up to 50% income tax relief per household, the demand stimulus brought by the analysis is less significant than that of superbonus.
Overall, while Italy is expected to maintain some demand this year, it is unlikely that demand will grow significantly without other stimulus policies, simplifying grid connection review procedures and improving grid transmission, and PV demand could be stimulated by expanding rural power development and other large-scale projects. It is currently estimated that Italy will meet its 2030 installation target of about 36%, with an average of at least 7There is still considerable PV demand for 3GW of installed capacity in the long run, but if we want to accelerate the pace of PV installation, we still need to see whether the above problems can be improved.
Looking at the European market from the first quarter to the first half of 2024, due to the impact of winter and the shortage of installed manpower in the first quarter, the demand may be affected by the traditional off-season for European cargo pulling, but in the near future, European distributors have accelerated the speed of module inventory consumption, and the rapid inventory reduction will enable Europe to pull goods and replenish the warehouse, which is expected to support the European market demand in the first quarter of this year to a certain extent. However, in terms of long-term demand, the average electricity price in Europe fell from a high of 438 euros per MWh in September 2022 to 84 euros per MWh in December 2023, a drop of more than 80%, which may affect the degree of demand for PV by end users, making it difficult to reproduce the demand heat of the same period last year in the first half of this year. And in terms of year-round demand, with.
In the second and third quarters, the European market is expected to maintain a certain degree of demand, and with the arrival of the off-season in the fourth quarter, there may be a normal downward revision of the pulling momentum.
And in terms of year-round demand, with.
In the second and third quarters, the European market is expected to maintain a certain degree of demand, and with the arrival of the off-season in the fourth quarter, there may be a normal downward revision of the pulling momentum.
On the whole, the rapid consumption of European inventories is expected to maintain a certain amount of demand in the first quarter of this year, but it cannot reproduce the tide of pulling goods in the same period last year; In the second half of the year, with the battery technology from P to N, the demand is expected to be **, and this year's demand has the opportunity to grow by at least 15% compared with last year. Looking forward to long-term demand, as most European countries want to meet the 2030 installation target, but the current compliance rate of most countries has not exceeded 40%, reflecting the urgency of accelerating the installation rate, and net zero has become the energy development goal of most European countries and even the European Union, long-term demand is expected to continue to rise.
Solar photovoltaic power generation