The International Energy Agency (IEA) has suggested that even diversification and expansion of the solar panel supply chain across the globe will promote energy transition to net zero emissions.
The IEA in a recent report also showed that China has overtaken Europe, Japan and the United States on investment and innovation in global manufacturing capacity for solar panels.
The agency also said that although Chinese industrial and innovation policies focused on expanding solar panel production, and whereas markets have helped solar PV become the most affordable electricity generation technology in many parts of the world; it has also led to imbalances in solar PV supply chains.
According to the report, China’s share in all the key manufacturing stages of solar panels has gone above 80%.
The IEA executive director, Fatih Birol, said that “China has been instrumental in bringing down costs worldwide for solar PV, with multiple benefits for clean energy transitions.
“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.”
The agency in the report noted that annual additions of solar PV capacity to electricity systems around the world need to be more than quadruple by 2030 in order to be on track with its plan of reaching net zero emissions by 2050.
It stated that “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.”
According to the report, new solar PV manufacturing facilities along the global supply chain will attract $120 billion of investment by 2030, adding that the solar 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.
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