China Could Add 55-65 GW of Solar Capacity in 2021: China Solar Association

The Solar Manufacturing Association of China predicts that the country can add approximately 55 to 65 GWs of solar capacity in 2021.

In a note on thursday, the association said that these additions could take total solar installations of China beyond 300 GW by the end of the year. However, the solar power installation reached only about 13 GW in the first six months, as a supply constraint on solar PV raw material and rising product prices limited the development of new solar projects.

“The progress of utility-scale solar projects in the coming months will depend on price movements alongside the solar supply chain,” Wang Bohua, honorary president of the China Photovoltaic Industry Association (CPIA) spoke at an industrial conference.

Notably, the price of polysilicon, a key raw material for making solar cells, was three-and-a-half times higher in June than at the end of last year.

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However, Wang expected inflation in distributed solar projects and residential installations in the second half of the year, pushed by government policies aiming to boost renewable consumption.

Mr. Bohua calculated 55 GW-65 GW of new capacity this year and said the average new solar capacity installation was expected at about 70 GW-90 GW a year over 2021-2025. That estimate is actually lower than the 100GW per annum estimate that was drawn up by some analysts, based on China’s net zero plans.

In May this year, China ordered power transmission firms to connect a minimum of 90 GW of wind and solar capacity to the grid. It wants power generation from solar and wind plants to account for about 11% of total power consumption in 2021, from 9.7% in 2020.

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Providently, with 253 GW of installed capacity, China has the world’s largest solar power capacity compared with about 151 GW in the European Union, according to International Energy Agency.

The CPIA also forecast China’s exports of solar modules to increase in 2021, following the strong growth of global solar power capacity. But it also warned that trade and political disputes could hinder the sales.

As we know that the United States banned imports from five Chinese solar companies accused of using forced labor in Xinjiang, in late June. Consequently, CPIA showed that China’s solar module exports were 36.9 GW in the first five months, 35.1% higher than a year earlier, and the exports may have reached 44-46 GW by the end of June, preliminary data showed. Key markets like India could also become smaller to enter, as tariff barriers and domesic manufacturing becomes the focus next year.