This special report examines solar PV supply chains from raw materials all the way to the finished product, spanning the five main segments of the manufacturing process: polysilicon, ingots, wafers, cells and modules.
What is value creation along the solar PV supply chain?
Value creation along the solar PV supply chain involves a broad range of goods and services (Box 1). Some of these goods and services are supplied domestically, but many others are traded across borders. This section provides an overview of global trade flows in selected goods along the solar PV value chain.
Included in the analysis are machines to manufacture solar PV wafers, cells, modules and panels, along with selected solar PV components, such as PV generators, inverters, PV cells and, where relevant, the parts needed to produce some of these goods (see Appendix).
How can solar PV supply chain diversification reduce supply chain risks?
Because diversification is one of the key strategies for reducing supply chain risks, the report assesses the opportunities and challenges of developing solar PV supply chains in terms of job creation, investment requirements, manufacturing costs, emissions and recycling.
Currently, the cost competitiveness of existing solar PV manufacturing is a key challenge to diversifying supply chains. China is the most cost-competitive location to manufacture all components of the solar PV supply chain. Costs in China are 10% lower than in India, 20% lower than in the United States, and 35% lower than in Europe.
Is the solar PV manufacturing sector financially sustainable?
The long-term financial sustainability of the solar PV manufacturing sector is critical for rapid and cost-effective clean energy transitions. The net profitability of the solar PV sector for all supply chain segments has been volatile, resulting in several bankruptcies despite policy support.
Global capacity for manufacturing wafers and cells, which are key solar PV elements, and for assembling them into solar panels (also known as modules), exceeded demand by at least 100% at the end of 2021. By contrast, production of polysilicon, the key material for solar PV, is currently a bottleneck in an otherwise oversupplied supply chain.