How did China become the PV market leader?

How did China become the PV market leader?

In order to get out of the energy crisis and fight against global warming, the European Union has defined the rapid deployment of solar energy as a strategic issue! While these measures aim to increase Europe’s energy sovereignty, another major aspect must be addressed: our industrial dependence in the photovoltaic sector. In fact, China today holds a virtual monopoly in the PV sector.

Indeed, the People’s Republic has gone from 7% of world solar panel production in 2005 to 70% in 2022. How did China manage to build this monopoly in under twenty years?

A strong policy in favor of PV in China

China’s success is primarily due to a strong incentive policy. Indeed, in the 2000s, China added solar energy to its list of 7 “strategic emerging sectors”. Massive incentives were then put in place: permissions, subsidies, simplification and acceleration of procedures.

All in all, China has invested $50 billion in the growth of the PV industry since 2011, which is ten times more than Europe (source: International Energy Agency).

Low-cost electricity

In addition, Chinese manufacturers can rely on a major advantage: cheap electricity. In fact, electricity in China is 30% cheaper than on the world market. Yet, the price of electricity has a significant impact on the entire PV value chain. Electricity accounts for 40% of the expenses of polysilicon producers in particular.

However, it should be noted that most of this energy is produced in coal-fired power plants. In addition, a major concern remains: the forced labor of the Uighurs.

For a European industrial sovereignty

Today, it is urgent for Europe to put in place strong measures that encourage the development of a European solar industry in order to ensure European sovereignty and a real energy and ecological transition.

This is why CARBON has joined the European Photovoltaic Industry Alliance. The aim of this alliance is to give a new boost to the industry and enable the manufacture of competitive, sustainable and low-carbon European solar panels.

Source: L’ombre des forçats ouïgours sur le solaire chinois, an article by Jérémy André in Le Point