China is on track to set a new record for solar power installations in 2024, driven by falling production costs and increased global interest in renewable energy, said industry experts and company executives.

With the world's largest, most complete new-energy industry chain, China is expected to install 230 to 260 gigawatts of solar capacity this year, topping the record of 217 GW set last year, according to the China Photovoltaic Industry Association.

This is mainly driven by lower module prices, a robust rooftop PV market and the commissioning of the country's energy megabases, which aim to develop large-scale wind and solar installations mainly in desert areas, it said.

Accelerated grid construction across the nation, which allows solar energy to be transmitted to demand centers further afield, has also helped push installations higher than previously thought, it added.

Despite ongoing challenges in the photovoltaic industry, including significant price reductions and reduced profit margins, demand for solar energy remains strong, both domestically and internationally, said Wang Bohua, honorary chairman of the China Photovoltaic Industry Association.

China's new photovoltaic installations reached 181 GW during the first 10 months, a 27 percent year-on-year increase, while the country's exports of solar cells and modules grew by more than 40 percent and 15 percent year-on-year respectively, he said during the 2024 annual conference of the photovoltaic industry held in Sichuan province earlier this month.

India, Turkiye and Cambodia are the top three export markets for batteries, with exports to India remaining at a high level. Europe remains the largest export market for modules, though its market share has significantly declined, said Wang.

Outside of Europe, South Asia, Latin America and the Middle East have relatively large market shares, indicating a notable trend toward diversification in module export markets, with other markets outside of the top 10 showing substantial growth, he said.

Wang Hongzhi, head of the National Energy Administration, said during the recently held national energy work conference that China has continued accelerating the construction of large-scale wind and solar power bases in the Gobi Desert and other arid regions in 2024 amid efforts to boost renewable power.

By the end of 2024, China has installed about 510 million kilowatts of wind power and 840 million kW of photovoltaic power, with the utilization rate remaining above 95 percent, driving rapid growth in both sectors, he said.

One of the drivers of China's rapid advancements in solar power development is a series of breakthroughs in solar cell technology, including the continuous improvement in the efficiency of crystalline silicon cells and the rise of emerging technologies like perovskite solar cells, which have enabled Chinese manufacturers to produce more energy-efficient panels at a lower cost.

Longi Green Energy Technology Co, the world's biggest PV panel maker, saw its Jiaxing production base included in the global lighthouse network by the World Economic Forum in 2023, the world's first lighthouse factory in the PV industry.

In the past three years, Longi has broken the cell efficiency record 18 times in a row. Today, the company holds two cell efficiency world records, 34.6 percent for crystalline silicon-perovskite tandem solar cells, and 27.30 percent for crystalline silicon heterojunction back contact solar cells.

BloombergNEF said earlier that it expected module prices to remain low at around 9 US cents per watt on the free market for the rest of 2024.Prices could hit new lows, staying around 8 to 9 US cents per watt throughout 2025 due to further cost reductions and efficiency improvements in TOPCon technology, it said.

An international team led by scientists from the Institute of Chemistry under the Chinese Academy of Sciences developed earlier this year a new type of high-efficiency solar cell capable of achieving a photoelectric conversion efficiency of 26.4 percent, the highest efficiency for such solar cells to date.

Perovskite-organic tandem solar cells can achieve higher efficiency than traditional crystalline silicon cells by combining the light-absorbing properties of perovskite with the flexibility of organic materials. They are also cheaper to produce and more versatile, with potential for use in a wider range of applications, said Li Yongfang, an academician and a researcher at the institute, who is involved with the development.

Tan Youru, a solar analyst at BloombergNEF, said China's photovoltaic industry is currently grappling with demand-side challenges, particularly issues related to capacity absorption, which are expected to slow long-term growth.

"On the supply side, as financial barriers increase and technological bottlenecks emerge, the sector is entering a period of intense competition, with companies likely to face greater competition and potential market exit," Tan said. "While the rapidly changing global trade environment presents significant challenges for the industry as it navigates these shifting dynamics, leading solar companies with continuous technological investment and business model renovation are expected to rise through it."

While Chinese solar companies are readjusting and accelerating their global capacity expansion beyond Southeast Asia in response to new trade barriers and local manufacturing incentives, the US remains one of the most profitable and promising markets, with relatively low risk for manufacturing plants being set up locally, especially with the push for renewable energy manufacturing to return, he said.

"With the upcoming shift toward greater localized production, the industry is expected to face fewer additional risks in the US market," said Tan. "The upcoming launch of overseas polysilicon manufacturing in the Middle East also offers significant cost advantages, providing a solid foundation for establishing a localized photovoltaic supply chain in the region."

Tan added that Europe's solar market is slowing due to lower power prices and market saturation, but there is still strong growth in other markets including the US, China and Saudi Arabia.

Despite the technological advances leading to price declines for key components such as solar panels and batteries, it is also putting pressure on manufacturers, with many facing squeezed margins. The increased competition in the global market has only compounded these difficulties.

In turn, industry experts call for Chinese manufacturers to work together to maintain their competitive edge, amid a backdrop of the declining prices for key components, which in turn lead to increased competition and squeezed margins.

Gu Yu, deputy director-general of the trade remedy and investigation bureau of China's Ministry of Commerce, said photovoltaic companies should strengthen capacity adjustment by quickly focusing on optimizing existing capacity, controlling expansion and improving quality.

The photovoltaic industry has continued to make steady progress in 2024, contributing to the acceleration of China's green and low-carbon transformation and the development of a green, low-carbon and circular economy, he said.

Thanks to the collective efforts of the entire industry, by the end of September, China's total wind and solar power installations reached 1.25 billion kW, achieving the 2030 target for total wind and solar power capacity six years ahead of schedule, he added.

New products such as electric vehicles, lithium batteries and photovoltaic cells are increasingly becoming powerful drivers of China's development of new quality productive forces. While these products have shown strong export performance, they are also facing the pressure of foreign trade and investment restrictions, said Gu.

Even with these headwinds, industry leaders are optimistic about the long-term prospects of solar energy.

Cao Renxian, chairman of new energy power equipment maker Sungrow Power Supply and president of the CPIA, emphasized the need for innovation and continued investment in research and development to overcome current challenges and ensure sustained growth in the renewable energy sector.

It's essential to focus on diversified overseas layout, avoid concentrating efforts in the same overseas markets and carefully navigate the direction of expansion abroad, Cao said.

With clear advantages in Chinese solar products and technologies, we must proactively address international trade challenges and work together to navigate trade frictions, he added.

Strengthening international communication and cooperation is essential to promote the open, fair and orderly development of the global photovoltaic market, he said.

Global consultancy Rystad Energy expects 255 GW new solar PV installation from China in 2024, which is at the same level as the forecast after adjustment. Another surge in installation toward the end of the year is also expected, of around 20 GW from November and 50 GW from December, it said.

"Solar PV installations have maintained a quite high pace this year, and we had seen an average of over 18 GW of monthly installations this year in China till October," said Zhu Yicong, vice-president of renewables and power research at global consultancy Rystad Energy. "Renewable installations have surged since last year and the momentum has not been slowing down. China has shown its clear leadership in global solar PV installations and we are expecting close to 60 percent of global solar PV installations from China this year."

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