Solar module production in China – Image: Millenius|Shutterstock.com
China's dominance in solar module production remains
Our latest research shows that China continues to control all stages of solar module production, from polysilicon production to solar cell and module assembly.
a 2021 Bloomberg NEF report, China accounts for 97% of global silicon wafer production, 79% of PV cell production, and 67% of polysilicon production. Furthermore, China holds the largest share at every stage of solar module manufacturing, with its average share of the solar module supply chain increasing from 55% in 2010 to 84% in recent years. In addition, China controls 64% of the global market share of polysilicon, one of the key raw materials for solar module production.
The country's boom in solar module manufacturing has led to a price drop and an accelerated global adoption of solar energy, but it also poses a risk to the supply chain. China also dominates the solar market in terms of PV installations and total installed capacity. Overall, it is clear that China holds a dominant position in global solar module production, and this trend is expected to continue in the coming years.
Despite its dominance in solar production, China's solar industry is struggling with some problems
China is the world leader in solar panel production and investment in solar energy. According to a Bloomberg estimate, due to China's strong market penetration, roughly 60 to 75 percent of the value of a U.S.-assembled solar panel is generated in China, making it the dominant player in the global market. In 2021, China accounted for approximately 38% of photovoltaic (PV) growth, the highest share of any country, followed by the United States and the European Union. In 2021, China produced 75% of the world's photovoltaic modules, while the second-largest producer had a significantly smaller share.
Furthermore, China continues to lead in investment, accounting for nearly two-thirds of global large-scale solar investments. In the first half of 2022, the country invested $41 billion, a 173% increase year-on-year. According to the International Energy Agency (IEA), China also has the highest PV manufacturing capacity of any country or region in the world, followed by Europe and North America. Data indicates that in 2021, China will account for 67% of global PV cell manufacturing capacity and 74% of global PV module manufacturing capacity.
Despite its dominance in solar production, China's solar industry faces several challenges. The country is suffering from severe restrictions on renewable energy in northwest China, which have been particularly severe since 2015. The total amount of wasted solar power in 2015 was 4.65 MWh, representing a reduction rate of 12.6%. Furthermore, a shortage of glass is driving up costs and delaying the production of new solar modules in China, which manufactures more than 70% of the world's solar panels. Prices for the glass used to coat photovoltaic modules have increased by 71% since July 2020, and manufacturers are unable to produce it quickly enough.
Overall, China is the dominant player in the production of solar modules and investments in solar energy, with the largest production capacity and the highest growth rates in the world.
Keep in touch
