China, which has been promoting green energy by manufacturing maximum solar panels, has attracted the attention of the International Energy Agency (IEA) as it warned of disruption in the supply chain “if other players do not emerge as a potential competitor”. The IEA, in its report released on Thursday, July 7, noted that global solar PV manufacturing capacity has increasingly moved from Europe, Japan and the United States to China over the last decade. It warned how Beijing holds a major chunk of production units– nearly 80%– and has the capability to disrupt the supply chain all over the world.
“Today, China’s share in all the manufacturing stages of solar panels (such as polysilicon, ingots, wafers, cells and modules) exceeds 80%. 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,” according to an IEA report.
We just released a new @IEA Special Report on Solar PV Global Supply Chains! ☀️
It shows that the world needs more diverse solar panel supply chains to ensure a secure transition to #NetZero.
Explore the report ⬇️ https://t.co/VCSwjm3PwU — International Energy Agency (@IEA) July 7, 2022
The assessment report underscored how China has proved its dominance by investing $50 billion in new PV supply capacity– almost ten times more than Europe. Besides, it has also created more than 30,0000 manufacturing jobs across the solar PV value chain in the last decade. It hailed steps taken by Chinese President Xi Jinping for making green energy, especially solar panels, affordable in most developing nations. Emphasising that diversification is one of the key strategies for reducing solar panel supply chain risks worldwide, the report evaluates the opportunities and challenges of developing solar PV supply chains in terms of job creation, investment requirements, manufacturing costs, emissions and recycling.
International Energy Agency urges world leaders to support domestic solar panel supply units
The IEA finds that new solar PV manufacturing facilities along the global supply chain could attract $120 billion of investment by 2030. Also, it noted that the solar PV sector has the potential to double the number of PV manufacturing jobs to 1 million by 2030, with the most job-intensive areas in the manufacturing of modules and cells. In its report, it appealed to the government to focus more and support domestic solar PV manufacturing units. Also, it urged world leaders to address key challenges such as environmental and social sustainability, investment risks and cost competitiveness. Increasing decarbonisation of electricity supplies and greater diversification of solar PV supply chains should both help reduce this footprint in the future, the report notes.