Looking to buy solar panels? Our team recently explored the solar panel manufacturing landscape to understand options for potential buyers and importers. The full report can be downloaded on our website here.
Main Takeaways
- The upper supply chain is dominated by China-based manufacturers and is consolidated to major players.
- Several established manufacturers have production of cells and modules in Southeast Asia, and many are building capacity in the region. Some major players are also locating small capacities of solar module manufacturing in the USA.
- Every potential importer should understand their legal obligations to verify country of origin, understand if anti-dumping or countervailing duties apply, and if there is forced labor in the supply chain.
First and Foremost, Regulatory Considerations
❗Before making any purchase, it is important for any potential buyer to understand your country’s laws and regulations relevant to importing solar panels. In the USA, importers are responsible for verifying country of origin, checking anti-dumping or countervailing duties apply, and identifying forced labor concerns in the product supply chain. See recent action by US Customs blocking over 1,000 solar panel shipments due to forced labor concerns. Do your homework!
Global Solar Panel Supply Chain Overview
To understand the segments of the solar panel supply chain, the following chart shows the production flow for the solar power market:
The photovoltaic (PV) supply chain starts with silicon production which requires high capital expenditure, complicated technology, and an overall high entry barrier. Ingots are cut and shaped, then sliced into wafers using high precision cutting techniques. Wafers are manufactured into solar cells through a multiple step manufacturing process that entails etching, doping, coating, and applying electrical contacts. Solar cells are then interconnected and packaged to form solar modules, which together with system components such as batteries and inverters, are distributed to installers, systems integrators, service providers, or directly to end-users for installation for on-grid or off-grid systems.
The above chart shows how China-based manufacturers dominate the solar power supply chain. According to the CIPV (China Photovoltaic Industry Association), in 2021, total exports of solar power products from China amounted to USD 28.43 billion with a year-on-year growth of 43.9%. The total export of modules from China was about 98.5 GW with 2021 year-on-year growth of 25.1%.
The rise of China as a solar manufacturing hub dates back to 2004. At the time, a handful of China-based private solar companies were formed to supply a rise in solar power demand in Germany. In 2012, due to a global push for renewable energy, China’s government heavily promoted clean energy and solar power was one of the important areas to receive significant government investment. Currently, the China solar power installation market takes up more than 40% of global annual new installation.
The supply chain is consolidated and dominated by top players that continue to expand the product capacity to make it more difficult for smaller players and newcomers to compete. Top players focus resources on in research and development activities to gain an edge over established competition.
Among the top players, Chinese-owned module manufacturers dominate over 70% of the global market share. According to PV Manufacturing & Technology, there are eight Chinese manufacturers among the top 10 module suppliers in 2021, which are LONGi Solar, Trina Solar, JA Solar, Jinko Solar, Canadian Solar, Risen Energy, Suntech Power, and Astronergy. Non-China headquartered players include South Korean Q CELLS, USA-based First Solar, Canada-based Canadian Solar.
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