China exported 10.8 GW of modules in December, close to the 10.7 GW in November, ending the four-month decline since export volume peak in July. Overall, China posted stellar performance, exporting 154.8 GW of modules last year, a 74% increase on 2021’s 88.8 GW. Monthly export volumes were at the highest during May and July, then dropped successively until November, for overseas markets slowed down inventory draws, as inventory built up due to large amount of imports in the first half of the year. The decline ended in December. Overall, export volume was lower in the fourth quarter of 2022.
Markets saw milder changes in December than in the previous month. Import volumes of Europe and the U.S. decreased marginally. The Asia-Pacific market is steady. The Middle East imported relatively more modules than in November, but the volume was too small and only make up for other countries’ marginal declines. Overall, global import volume in December was unchanged from a month earlier.
Europe imported 5.9 GW of modules from China in December, a 71% year-on-year increase, but a 3% decrease on the 6.1 GW in November. In 2022, the bloc imported 86.6 GW of modules, a 112% substantial increase on 2021’s 40.9 GW, accounting for 56% of China’s total export volume. Europe is the fastest-growing and largest market in 2022.
In 2022, Russia’s war on Ukraine sent energy prices to surge, urging European countries to accelerate energy transition. As a result, module demand increased. Germany, Spain, Poland, and the Netherlands saw the most significant growth, whilst demand of smaller markets doubled. Import volume rose from 3.1 GW in early 2022 and peaked at 9.1 GW in July. Monthly module demand from January to July were doubled month-on-month. However, subject to inverter and labor shortages, installation is far slower than import. As a result, inventory piled up, and end users slowed down inventory in the second half of the year. Import volume dropped rapidly since the peak in July. It is still uncertain how long high inventory level will hold back demand. With supportive policy frameworks, inventory draws will recover, if inventories are depleted by the first half of 2023.
The Asia-Pacific market imported 1.9 GW of modules from China in December. The figure was little changed from November but a 13% year-on-year decrease. In 2022, the region imported 28.5 GW of modules from China, a 27% increase from a year earlier.
India’s imposition of a 40% BCD on module imports in early 2022 triggered strong inventory draws in the first quarter of the year. Import volume was as high as 8.1 GW, accounting for 91% of its annual demand. In March, demand shrank rapidly as the BCD took effect. By the end of April, there were merely 800 MW of Chinese module imports. Still, stockpiling in the first quarter made India the largest market in the Asia-Pacific region.
Other markets were steady, with Australia and Japan being the major sources of demand. Japan imported 6.9 GW of modules from China in 2022, a 17% increase from 2021’s 5.9 GW. Australia was one of the few major markets of which import volume dropped. It imported 4.9 GW of modules from China in 2022, a 5% decrease from 2021’s 5.1 GW.
The Americas imported 1.6 GW of module from China in December, a 32% year-on-year decrease and 6% month-on-month decrease. The continent imported 24.8 GW of Chinese modules in 2022, a 50% increase on 2021’s 16.6 GW.
Brazil contributed 80% of the increase. The country introduced Law 14.300 introduced in early 2022, charging small-scale distributed generation projects a grid fee. In Brazil, more than 65% of PV projects are distributed generation projects. The law gave rise to an installation rush, making Brazil one of the world’s largest export markets for Chinese modules. At the end of 2022, monthly import volume started to drop. Despite the enactment of the law and weakening inventory draws due to inventories piled up in the first half of the year, annual import volume came in at 17.9 GW, a 58% marked increase from 2021’s 11.3 GW, making Brazil the world’s second-largest export market for Chinese modules, second only to the Netherlands, the logistics hub of Europe, accounting for 12% of China’s total module exports.
Middle East and South Africa
The Middle East imported 1 GW of modules from China in December and 11.4 GW in 2022, a 78% increase from a year earlier. Pakistan and Israel used to be the larger market within the region. In 2022, the UAE and Saudi Arabia emerged with significant growths. The UAE imported 3.6 GW of modules from China in 2022, a 340% increase, surpassing Pakistan’s 2.9 GW to be the largest importer of Chinese modules in the Middle East. Saudi Arabia imported 1.2 GW of modules from China in 2022, a marked increase compared with no more than 100 MW of demand in 2021. In addition to the promotion of utility-scale projects, Saudi Arabia and China signed several renewable energy investment agreements. Chinese manufacturers are reportedly considering establishing a supply chain in Saudi Arabia. Demand in the Middle East will further increase in 2023.
Africa imported 3.4 GW of modules from China in 2022, a 36% year-on-year increase, but the volume was still fractional.
China customs data of 2022 show a growth far higher than expected in the European market amid the Russia-Ukraine conflict. As energy prices soared, other markets saw demand evidently increase. 2022 was a robust year for the PV industry. Whether markets can sustain such high growths rates this year remains in question given much larger numbers of the base period and international trade policies that hold back demand, such as the Uyghur Forced Labor Prevention Act of the U.S., Brazil’s Law 14.3000, and India’s BCD tariff.
Presently, demand is expected to be weak in the first quarter of 2023. For Europe, the first quarter is the low season of a year, whilst inventories from the first half of 2022 have yet to be fully depleted. India usually has stronger inventory draws early in a year as the fiscal year approaches, but the BCD dampens demand this year. Overall, inventory draws overseas are not expected to rebound markedly by the second quarter of this year.