Diversifying the Solar Supply Chain
With the increasing demand of Solar PV panels, the discussion around the global manufacturing of Solar has become more prevalent.
Over the last few years China has decreased the cost of Solar manufacturing through industrial and innovation policies focused on expanding Solar production and making the technology more affordable. The policies have contributed to the global success of the technology, but this has led to current supply chains to be heavily concentrated in China.
Ensuring a secure transition to net zero energy, global Solar PV supply chains must expand and diversify.
Overtime, current supply chains will be put under significant strain due to increased demand. The challenge of matching supply with increasing demand provides opportunity for more countries to join the Solar industry.
Supply chain diversification could not only assist the market in keeping up with current demand of Solar PV but also benefit new regions. Countries could benefit through having their employment opportunities increased, contributing positively to the environment and increasing their energy security.
The International Energy Agency (IEA) have assessed the potential challenge of supply chain diversification. IEA Director Fatih Birol explained:
“The level of geographical concentration in global supply chains… poses potential challenges that governments need to address. Accelerating clean energy transitions around the world will put further strain on these supply chains to meet growing demand, but this also offers opportunities for other countries and regions to help diversify production and make it more resilient.”
With 80% of current Solar PV manufacturing being in China, the need for a more diversified supply chain has never been more necessary.
The Chinese Solar industry has been pivotal in bringing down the cost of Solar PV manufacturing and adding to the global success of the technology however, without a diversified supply chain to support increasing demand, the global success of solar will be short lived.
Read IEA’s Official Press Release.
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