According to the latest release of the International Energy Agency's Photovoltaic Power Systems Program (IEA PVPS), France achieved a significant leap in solar PV installed capacity in 2023, adding 4 gigawatts (GW), an achievement that set a new record.

This year's growth is strong compared to the revised 3.2GW in 2022. The main factors driving this growth include the decline in market electricity prices, the sharp reduction in solar module prices, and the formal implementation of the Renewable Energy Acceleration Act. The IEA PVPS Working Group explored in depth the multi-dimensional role of PV in the energy transition and noted that competitive bidding is now generally more attractive for solar purchasers than traditional power purchase agreements (PPAs).

While the fall in power and module prices has reduced the cost of investment in new PV projects, the report notes that this does not "automatically mean that the PPAs market will become more attractive," a change that has prompted a growing interest in competitive bidding to secure a return on investment and boost financing activity. In France's Multi-Year Energy Plan (PPE) tender in September 2023, the government awarded up to 1.5GW of PV capacity, a record high for the program.

The International Energy Agency (IEA) further pointed out that module prices have fallen by 40-50%, greatly improving the competitiveness of solar photovoltaic power generation. The aggressive hoarding of solar panels by European buyers, coupled with large-scale capacity expansion by Asian manufacturers and trade barriers in the U.S. market, have combined to cause supply in the European market to exceed demand, which has led to a sharp drop in module prices. According to IEA estimates, the current backlog of components in European warehouses is between 40GW and 100GW, which is far more than the annual installed capacity of the entire European Union.

The report also mentioned that international market growth has not kept pace with supply growth, especially in Europe, where project debt financing levels continue to remain high in 2022 (over 4% in France), which poses a challenge to project profitability. Meanwhile, a report released this week by the International Renewable Energy Agency (IRENA) highlights that solar PV is the only clean energy technology on track to meet the 2030 targets set out at COP28 last year, and its investment prospects are widely viewed favorably. Editor/Xu Shengpeng