Latest SolarPower Europe Report: A positive outlook in spite of polysilicon shortage

Published: 27 October 2021

Polysilicon is a key input for solar panel manufacturing, and there has been a shortage in recent months.

On July 21, SolarPower Europe published their 136-page Global Market Outlook for Solar Power. While the report recognises the polysilicon shortage affecting the solar industry in 2021, it also includes promising forecasts. Negative predictions were made back in 2020, considering the potential impact of the COVID-19 pandemic. However, the solar industry has performed far better than expected, and the latest projections are much more favourable.

According to SolarPower Europe, the world will add 163GW of photovoltaic capacity by the end of 2021, reaching 773GW of cumulative capacity. From 2022 onward, the global solar capacity is set to increase by more than 200GW per year.

With the expected growth rate of solar power, the world will surpass one terawatt (1,000 GW) at some point between 2022 and 2023. However, in the most optimistic scenario from SolarPower Europe, the world reaches 2.15TW halfway through the 2020s. This can happen if the green hydrogen economy takes off during the following years, since solar power is one of the most promising energy sources for hydrogen electrolysis.

Solar savings calculator banner.

Australia is among the leading solar countries

Solar installations in different countries can be compared by total capacity or per capita. As you might guess, China is the country with the highest installed capacity, and this is reflected in the latest report from the International Renewable Energy Agency (IRENA). 

  • At the time of the report, there were 707,495 MW of global capacity, with 253,834 MW located in China (36%).
  • In other words, China has installed one-third of the world’s solar panels.

However, when countries are compared based on their solar capacity per capita, Australia tops the list by far:

RankCountrySolar Capacity per Capita

By 2025 China will be adding over 100GW of solar power per year, according to the SolarPower Europe forecast. The US could be installing 25.5-26 GW per year, while Europe will be adding over 50 GW per year.

How does the polysilicon shortage affect the solar industry?

Polysilicon is a key material for solar panel manufacturing, and there has been a shortage in recent months. This has several causes, including power shortages affecting key manufacturing hubs in China, combined with global supply chain disruptions. However, SolarPower Europe concludes this is a temporary situation, which does not affect their positive growth forecasts for solar power.

  • Solar manufacturers are aware that most projects are driven by an economic analysis of their costs and benefits, especially unsubsidised projects owned by corporate clients.
  • If there is a major increase in solar panel prices, many large projects are likely to get cancelled or postponed.
  • Solar manufacturers are working to keep their costs at a reasonable level and prevent this situation. Some projects have tighter economic projections, and even minor price hikes can cause delays.
  • However, due to the rising price of polysilicon, new manufacturers are entering the industry and expanding the total production capacity. This will increase the polysilicon supply in the short time, and prices will likely stabilise and decrease again.

Australia has the advantage of being close to China, where 80% of the world’s solar panels are produced. Import tariffs for solar products are also relatively low, and there is a nationwide incentive program for solar installations that meet certain conditions from the Australian Clean Energy Regulator. These factors help mitigate the impact of higher polysilicon prices.

Keep in mind that Australia’s nationwide solar incentive is slightly decreased each year, and it will drop by around 10% between 2021 and 2022. Even with a minor increase in solar panel prices, it makes sense to install your system before 2021 ends and the incentive rate drops. To make sure your installation qualifies for this benefit, you can contact Nectr.

Read more on our blog.

Next Steps…

Interested in solar? By clicking below you can use our smart solar calculator to find out just how much you could save with solar, what rebate you are eligible for, and the impact you will have on the environment.

Don’t wait until next quarter’s bloated bill, and get started today!

Click here to calculate your solar savings!

Join over 20,000 homeowners who have made the switch with Nectr, or the 1000+ positive reviewers who have been more than happy with their solar install.

Otherwise, you can always contact us on 1300 133 556, or email if you prefer at

Solar calculator with call to action.

Interested in Solar?

Find out if you’re eligible for solar and how much you could save by switching.

Start Now

Get in touch with one of our experts

Contact Us