In recent years, the global solar PV landscape has experienced significant shifts, with China at the forefront as a dominant exporter of solar technology. In the first half of 2024, Chinese solar PV exports reached record levels, doubling in certain regions and expanding into new markets. This rapid growth, however, has not been without its challenges, particularly in traditionally strong markets such as the U.S. and Europe, where demand for Chinese solar modules has faced recent obstacles. Meanwhile, Southeast Asia has emerged as a promising growth area, demonstrating increasing demand for solar solutions as it moves towards cleaner energy sources.

Shifting Demand in Europe and the U.S.

Historically, Europe has been one of the largest importers of Chinese solar PV modules, thanks to its strong commitment to renewable energy and decarbonization targets. In H1 2023, Chinese exports to Europe reached over 65,000 MW, a significant share of China’s total solar exports. However, in H1 2024, demand in Europe saw a decline, with imports dropping to around 55,740 MW. This decrease is attributed to several factors, including falling traditional energy prices, which reduced the immediate cost competitiveness of solar energy, as well as increased inventory levels and logistical delays in centralized installations. The lower demand is a signal that Europe may need time to adjust to recent changes in the energy market, and Chinese exporters may face longer timelines in clearing existing stock.

The U.S. market also shows a complex dynamic. In 2023, the U.S. made notable strides in solar energy adoption, with a 51% year-on-year increase in installed PV capacity, driven by incentives from the Inflation Reduction Act (IRA), falling PV system costs, and expected lower lending rates. However, despite this growth in domestic solar installations, imports from China have remained limited due to tariffs, supply chain restrictions, and ongoing geopolitical factors. In H1 2024, Chinese solar exports to the U.S. market amounted to only around 437 MW, a relatively small portion compared to other regions. This signals that while the U.S. market is growing in solar adoption, it is increasingly relying on domestic manufacturing and alternative suppliers, especially as policymakers emphasize energy independence.

Southeast Asia’s Growing Role in Solar Demand

In recent years, Southeast Asia has emerged as a strong growth area for Chinese solar exports, with imports more than doubling from 17,263 MW in H1 2023 to 34,741 MW in H1 2024. This growth is part of a broader energy transformation in the region, where electricity demand is projected to rise by 4% annually through 2035, outpacing the 3% growth in overall energy demand, according to the International Energy Agency (IEA). The Southeast Asian market’s growth is driven by several factors as well, including supportive government policies, attractive financing options, and the increasing affordability of solar technology.

Currently over 1,300 TWh, Southeast Asia’s electricity demand is expected to exceed 2,000 TWh by 2035—more than double Japan’s current demand. This surge is largely driven by increasing usage of air conditioning in the buildings sector, with transport and industry also contributing to the rise. To meet these needs, Southeast Asian nations are prioritizing investments in renewable energy, positioning solar power as a key solution for sustainable growth and energy security.

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