A new report from the International Energy Agency underscores the importance of maintaining geographic diversity in the global PV supply chain to prevent supply chain fragility due to bankruptcy and underinvestment.
According to the International Energy Agency (IEA), more than 30% of the global comprehensive companies operating solar module manufacturing business are at moderate or high risk of bankruptcy.
In its Special Report on Solar PV Global Supply Chains, the agency highlighted that only 15% of these manufacturers are at high risk of bankruptcy, compared with about 28% in 2018. As for polysilicon suppliers, about 11% are currently at high risk of bankruptcy, while another estimated 49% are at medium risk. "The bankruptcy risk of polysilicon companies has declined significantly in 2021 due to higher polysilicon prices. However, a return to low polysilicon prices may reverse this change," the report reads.
The paper also comprehensively describes the key vulnerabilities of the global PV supply chain, while emphasizing the need for the industry to maintain broad geographic diversity. Analysts at the IEA emphasized: “China has played a role in reducing the cost of solar PV globally and has multiple contributions to the clean energy transition. At the same time, the geographic concentration of the global supply chain presents potential challenges that the government needs to address. question."
According to their estimates, by 2025, the world will be almost entirely dependent on China for solar panel production. They noted: “Based on the manufacturing capacity under construction, China’s share of global polysilicon, ingot and wafer production will soon reach nearly 95%. The report states that China’s Xinjiang currently accounts for 40% of global polysilicon manufacturing. In global supply chains, this level of concentration implies considerable vulnerability; solar PV is no exception.”
