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China dominates Europe, US and Japan in solar panel supply chain: Report

"The country (China) is home to the world's 10 top suppliers of solar PV manufacturing equipment," IEA report said.

China dominates Europe, US and Japan in solar panel supply chain: Report Pic Credit: File Photo

Paris: The International Energy Agency (IEA) has warned in its latest report that global solar PV manufacturing capacity has increasingly moved from Europe, Japan and the United States to China over the last decade, with the second-largest economy's share in all the manufacturing stages of solar panels exceeding 80 per cent.

The IEA Special Report on Solar PV Global Supply Chains states that China has invested over USD 50 billion in new PV supply capacity - ten times more than Europe - and created more than 300 000 manufacturing jobs across the solar PV value chain since 2011.

"Today, China`s share in all the manufacturing stages of solar panels (such as polysilicon, ingots, wafers, cells and modules) exceeds 80 per cent. This is more than double China`s share of global PV demand. In addition, the country is home to the world`s 10 top suppliers of solar PV manufacturing equipment," IEA report said.

'Chinese govt shaped the global supply, demand, price of solar PV'

The report highlighted how government policies in China have shaped the global supply, demand and price of solar PV over the last decade. Chinese industrial policies focusing on solar PV as a strategic sector and on growing domestic demand have enabled economies of scale and supported continuous innovation throughout the supply chain.

There are imbalances in the solar PV supply chain

These policies have contributed to a cost decline more than 80 per cent, helping solar PV to become the most affordable electricity generation technology in many parts of the world. However, they have also led to supply-demand imbalances in the PV supply chain.

According to the IEA, global capacity for manufacturing wafers and cells, which are key solar PV elements, and for assembling them into solar panels (also known as modules), exceeded demand by at least 100 per cent at the end of 2021."By contrast, production of polysilicon, the key material for solar PV, is currently a bottleneck in an otherwise oversupplied supply chain.

This has led to tight global supplies and a quadrupling of polysilicon prices over the last year," the report added. Solar PV products are a significant export for China. In 2021, the value of China's solar PV exports was over USD 30 billion, almost 7 per cent of China`s trade surplus over the last five years.

In addition, Chinese investments in Malaysia and Viet Nam also made these countries major exporters of PV products, accounting for around 10 per cent and 5 per cent respectively of their trade surpluses since 2017.The total value of global PV-related trade - including polysilicon, wafers, cells and modules - exceeded USD 40 billion in 2021, an increase of over 70 per cent from 2020.

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