The International Energy Agency's Photovoltaic Power Generation Systems Program (IA-PVPS) has released a report on the global photovoltaic market, which covers the installation, manufacturing, policy trends, and grid integration of photovoltaic systems.

According to the "Global PV Market Snapshot 2024" report released by the IEA-PVPS, the installed capacity of photovoltaic systems worldwide has grown from 1.2TW in 2022 to 1.6TW in 2023.

Analysts say that up to 446GW of PV systems will be commissioned in 2023, mainly driven by the rapid growth of the Chinese PV market, while estimating that the world currently has 1.5GW of PV module inventory.

"After several years of rising material and transportation costs, PV module prices have plummeted in an oversupplied market, and PV has remained strongly competitive even as electricity prices have declined following their historic peak in 2022," the IA-PVPS said.

The oversupply of PV modules last year revealed the difficulties of reconciling production and demand in this very diverse environment, according to the report. The report notes that while PV module production has increased significantly, the increase in PV system installed capacity has occurred in only a few countries outside of China.

"Political support for the PV market has been uneven in some countries, which may be attributed to difficulties in developing local PV module manufacturing facilities in an already saturated market," the report said. In the report, IA-PVPS explained that due to increased inventories, oversupply and intense competition among PV module manufacturers, PV module prices have fallen sharply, which has also put pressure on PV module manufacturing in some countries.

In other news, IA-PVPS said that both the rooftop PV market and the utility-scale PV market size will grow in 2023. About 45% of the new installed capacity comes from rooftop PV systems. Since 2018, the global rooftop PV market has continued to grow gradually, while the reduction in installation costs and the rise in electricity costs have prompted investors to accelerate investment in rooftop PV systems. The report notes that production consumers around the world are becoming more active market drivers, while also noting that some net metering rules are being removed as PV module costs decline.

In the last year, the number of countries with theoretical penetration of rooftop PV systems exceeding 10% has doubled to 18. Spain, the Netherlands, Chile and Greece led the way on this indicator, while more populous countries such as Germany and Japan also surpassed 10% for the first time.

The IA-PVPS said that as more and more countries have increased PV penetration, transmission and distribution system operators are becoming more active in managing PV systems. Some smaller countries and regions have such high penetration rates that rooftop PV systems can provide 100% of their electricity in a matter of hours.

The report also notes that policy support for battery storage systems is advancing, especially in countries with grid congestion, high PV penetration, or high electricity costs. The report warns that grid congestion and long grid connection times in some countries are preventing local markets from reaching their full potential. The cost burden of managing, strengthening and updating grid infrastructure is becoming one of the more sensitive topics, the IA-PVPS said.

"As penetration increases, new governance models that are compatible with market - and climate policy-driven deployment goals will need to be established to ensure that PV systems can be deployed smoothly," the report said.

In the broader energy transition, the IA-PVPS said PV will play an important role, with PV systems installed in 2023 accounting for more than 75 percent of all renewable energy capacity, due to continued cost reductions, technical performance and accessibility, and licensing processes that are generally faster than those for wind or hydro power facilities.

The EA-PVPS report follows reports published earlier this year on end-of-life PV module processing chains, grid integration measures and vehicle integrated PV in Germany.