Diversify Solar Panel Production For Net Zero Emission

Diversify Solar Panel Production For Net Zero Emission

The world can ensure a secure transition to net zero emissions only with the expansion and diversify of global production of solar panels whose global supply chains are at present heavily concentrated in China, according to a special report from the International Energy Agency (IEA). 

In the IEA Special Report on Solar PV Global Supply Chains, the agency also points out that Chinese industrial and innovation policies focused on expanding solar panel production and markets helped solar PV become the most affordable electricity generation technology across the world. However,  the report stated that this also this led to imbalances in solar PV supply chains.

China has been instrumental in bringing down costs worldwide for solar PV, with multiple benefits for clean energy transitions,” said IEA Executive Director Fatih Birol. “At the same time, the level of geographical concentration in global supply chains also 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.”

“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,” Dr Birol said. “Solar PV’s global supply chains will need to be scaled up in a way that ensures they are resilient, affordable and sustainable.”


In the report, the IEA said that the governments and stakeholders have begun to pay more attention to solar PV’s manufacturing supply chains as high commodity prices and supply chain bottlenecks have led to an increase of around 20 per cent in panel prices over the last year. These challenges – particularly apparent in the market for polysilicon, a key material for making solar panels – have resulted in delays in solar PV deliveries across the globe and higher prices.

Because diversification is one of the key strategies for reducing supply chain risks worldwide, the special report assesses the opportunities and challenges of developing supply chains in terms of job creation, investment requirements, manufacturing costs, emissions and recycling. It finds that new PV manufacturing facilities along the global supply chain could attract USD 120 billion of investment by 2030. And the 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.

The special report summarises policy approaches that governments have taken to support domestic solar PV manufacturing and highlights priority areas for action to improve security of supply and to address key challenges such as environmental and social sustainability, investment risks and cost competitiveness.


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