The firm expects global installations of solar to grow by 8% annually between 2022 and 2031 to more than 3500 GW capacity. It is anticipated that Europe will account for more than 9% – around 331 GW – of installations within that period. Wood Mackenzie says that the REPowerEU initiative has the potential to more than double that number.

Read more: Europe only building half the wind power necessary for Green Deal

“The global push to phase out fossil fuels and move to cleaner energy sources has driven innovation and policies that have resulted in tremendous cost reduction in the solar PV sector over the last two decades”, said Wood Mackenzie senior analyst Theo Theodorou.

“However, last year, a perfect storm of Covid disruptions, rapid recovery in demand from solar installations, fast-increasing freight rates, and high solar raw materials prices have pushed module prices more than 20% higher. Global prices for key raw materials such as polysilicon, silver, aluminium, copper and steel have all reached multiyear highs”.

The price of polysilicon, the main feedstock for producing wafers used in crystalline silicon solar cells, has roughly tripled over the past 18 months due to Covid-19 lockdowns and China’s energy problems which have led to delays in new capacity coming online.

While new polysilicon production capacity in China could potentially rebalance the market, prices are expected to remain at elevated levels throughout 2022.

Read more: China has tripled investments in solar energy

Europe’s main producer, Germany’s Wacker Chemie, manufactures around 60,000 tonnes of polysilicon annually, the vast majority is exported to China, as Europe does not have the downstream capacity to consume this amount.

(Source: IndustryEurope, by Steven Gislam 01/06/2022 08:00 )