China’s Monopoly Over Solar Manufacturing Industry is a Global Threat, IEA Report States

Solar Panels China Monopoly

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It is no secret that China has 80 percent monopoly on solar manufacturing industry. According to the International Energy Agency, this control has emerged as a threat to the huge consumption of solar PV systems needed to help achieve net zero emissions throughout the planet. With a lead on investment and innovation in the solar sector, China has solely handled the reduced costs that have made solar photovoltaic the most affordable power generation technology in many developing countries.

However, this affordability also boosted a heavy concentration of solar panel component manufacturing capacity in China, which is a threat to the needed investment. The IEA estimates that solar PV capacity across the world needs to increase four times within the next eight years if it needs to reach net zero emissions by 2050.

Executive director Fatih Birol said on the release of the IEA’s first report on solar PV supply chains, said;

As countries accelerate their efforts to reduce emissions, they need to ensure that their transition towards a sustainable energy system is built on secure foundations. Solar PV’s global supply chains will need to be scaled up in a way that ensures they are resilient, affordable and sustainable.

As per the study, the global capacity of basic solar panel components including polysilicon, ingots, wafers, cells and modules needs to double by 2030 and the current plants must be updated. It urges governments to expand their supply chains with new manufacturing facilities. China’s intense hold over the mining and melting of polysilicon amounts to 80 percent of the industry, which is estimated to increase up to 95 percent within the next three years.

Solar Panels China Monopoly is a Global Threat

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The research also points out that many major markets including Australia face the issue of solar installer shortages. IEA estimates that one in three solar industry jobs in Australia are at risk of staying unfilled in 2023. The statistics are scary as solar PV produced about 10 percent of Australia’s power in 2020-21. However, with most components being made in China, the country will be vulnerable.

The IEA examined the energy cost of electricity-intensive solar PV manufacturing, most of which is powered by fossil fuels. Another issue emerges as coal is used to produce over 60 percent of the electricity used for manufacturing in the sector, mostly because of its dominance in China. A dominant player is a threat to the entire industry as the prices of polysilicon have increased in the past year and a half, which has slowed the renewable energy projects.

Now, as the global solar power industry is too much dependent on China, this can highly affect the supply chain, and trade, creating the possibility of geopolitical risks. Not to mention, it can leave the supply chain vulnerable to major disruptions, from fires to facilities to flooding in the country.

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