Global solar PV manufacturing capacity is expected to reach almost 1 000 GW in 2024, adequate to meet annual IEA Net Zero by 2050 demand of almost 650 GW in 2030. However, wind equipment manufacturing continues to expand more slowly, such that it may not be able to keep pace with demand growth under this scenario through 2030. While China will dominate global wind and solar PV manufacturing capacity in the short term, solar PV project announcements indicate supply chain diversification

China reaffirmed its dominant position last year. In 2022, global solar PV manufacturing capacity increased by over 70% to reach almost 450 GW, with China accounting for over 95% of new facilities throughout the supply chain. In 2023 and 2024, global solar PV manufacturing capacity is expected to double, with China again claiming over 90% of this increase. Meanwhile, the forecast expects significant wafer, cell, and module manufacturing expansion in the ASEAN region through investments from Chinese manufacturers. For the first time, a relatively large deployment of manufacturing plants is also forecast for India and the United States, thanks to industrial policies introduced last year.

Governments in the United States, Europe and India have begun to prioritise solar PV supply chain diversification, implementing policies such as India’s Production Linked Incentive (PLI) scheme and the US Inflation Reduction Act (IRA) to provide direct financial incentives for domestic manufacturers to increase their competitiveness with Chinese ones. As a result, over 120% more new solar PV manufacturing projects were announced from November 2022 to May 2023, to potentially create national PV supply chains with over 20 GW of capacity in each region. 

However, differences in policy design between India and the United States have led to the promotion of different PV production segments. While India's PLI focuses on integrated facilities, the IRA provides tax credits for various PV segments, leading to mostly segment-specific project announcements.

New manufacturing capacity in the European Union makes up just 14% of announcements tracked by the IEA since August 2022. The EU Green Deal Industrial Plan for the Net-Zero Age and the Net-Zero Industry Act target specific percentages of domestic solar PV manufacturing, but do not yet include specific incentives. In addition, high industrial power prices have made it more expensive to manufacture solar PV equipment in EU countries. Without a manufacturing policy or domestic-content premiums, manufacturing solar PV equipment in the European Union is less competitive than in India or the United States.

Integrated, module and thinfilm manufacturing plants make up nearly 85% of new facilities, while capacity lags for dedicated manufacturing for new cells (less than 1%), ingots and wafers (9%) and polysilicon production (6%). Integrated manufacturing plants produce three or more components, but nearly 80% of this announced capacity does not include dedicated polysilicon production. In addition, while new module assembly plants will have a capacity of nearly 30 GW, this amount is not matched by capacity announced for other components, especially cells and polysilicon. These new plants will therefore still need to import cells and other components from China.

In 2022, manufacturing capacity for the main wind power components (nacelles, towers and blades) remained relatively stable at 110-120 GW. However, global production capabilities are anticipated to increase in line with demand over the next three years, resulting in approximately 120-140 GW of capacity by 2025, about one-third of what is required in 2030 to meet annual IEA Net Zero by 2050 demand.

Unlike solar PV manufacturing, wind equipment production is less concentrated geographically, as suppliers prefer to locate production plants close to demand centres due to the high costs and risks associated with transporting large and fragile components over long distances.

Until 2025, China is expected to remain the largest manufacturing hub for all main wind energy components, commensurate with its growing demand. However, the United States’ first manufacturing plants for offshore wind equipment are also anticipated to come online in this period to support planned offshore wind farm deployment.