ParisThe International Energy Agency (IEA) has warned in its latest report that global solar PV manufacturing capacity is growing faster than Europe, Japan and the United States. China Over the past decade, the share of the second largest economy in all manufacturing phases of solar panels has exceeded 80 percent.
The IEA’s Special Report on Solar PV Global Supply Chain states that China has invested more than US$50 billion in new PV supply capacity – ten times more than in Europe – and 300,000 in the solar PV value chain since 2011. More manufacturing jobs have been created.
“Today, China accounts for more than 80 percent of all manufacturing phases of solar panels (such as polysilicon, ingots, wafers, cells and modules). This is more than twice China’s share of global PV demand. In addition, the IEA’s The report states that the country is home to the world’s 10 top suppliers of solar PV manufacturing equipment.
‘Chinese government shapes global supply, demand, price of solar PV’
The report highlights how government policies in China have shaped global supply, demand and price of solar PV over the past decade. Chinese industrial policies focusing on solar PV as a strategic sector and growing domestic demand have enabled economies of scale and supported continued innovation in the supply chain.
There are imbalances in the solar PV supply chain
These policies have contributed to a more than 80 percent drop in costs, helping solar PV to become the cheapest power 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, the global capacity to manufacture wafers and cells, which are the major solar PV elements, and to assemble them into solar panels (also known as modules), is expected to grow by at least 100 percent by the end of 2021. exceeded the demand. Conversely, the production of polysilicon, the major material for solar PV, is currently a bottleneck in the supply chain that would otherwise have been produced.
This has led to tight global supplies and a quadrupling of polysilicon prices compared to the previous year.” Solar PV products are an important export to China. In 2021, China’s solar PV exports were valued at more than US$30 billion, approx. 7 percent of China’s trade surplus in the past five years.
In addition, Chinese investments in Malaysia and Vietnam have also made these countries major exporters of PV products, accounting for about 10 percent and 5 percent, respectively, of their trade surpluses since 2017. The total value of global PV-related business – including polysilicon, wafers, cells and modules – will exceed USD 40 billion in 2021, an increase of over 70 percent from 2020.