Energy
Visualizing China’s Dominance in the Solar Panel Supply Chain
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China’s Dominance in the Solar Panel Supply Chain
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Many governments are investing in renewable energy sources like solar power, but who controls the manufacturing of solar photovoltaic (PV) panels?
As it turns out, China owns the vast majority of the world’s solar panel supply chain, controlling at least 75% of every single key stage of solar photovoltaic panel manufacturing and processing.
This visualization shows the shares held by different countries and regions of the key stages of solar panel manufacturing, using data from the International Energy Agency (IEA).
Solar Panel Manufacturing, by Country and Stage
From polysilicon production to soldering finished solar cells and modules onto panels, China has the largest share in every stage of solar panel manufacturing.
Even back in 2010, the country made the majority of the world’s solar panels, but over the past 12 years, its average share of the solar panel supply chain has gone from 55% to 84%.
China also continues to lead in terms of investment, making up almost two-thirds of global large-scale solar investment. In the first half of 2022, the country invested $41 billion, a 173% increase from the year before.
| Country/Region | Solar Panel Demand | Average Share of Solar Panel Manufacturing Capacity |
|---|---|---|
| China | 36.4% | 84.0% |
| Europe | 16.8% | 2.9% |
| North America | 17.6% | 2.8% |
| Asia-Pacific | 13.2% | 9.1% |
| India | 6.9% | 1.3% |
| Rest of the World | 9.1% | 0.8% |
Source: IEA
Note: Percentages may not add up to 100% due to rounding
After China, the next leading nation in solar panel manufacturing is India, which makes up almost 3% of solar module manufacturing and 1% of cell manufacturing. To help meet the country’s goal of 280 gigawatts (GW) of installed solar power capacity by 2030 (currently 57.9 GW), in 2022 the Indian government allocated an additional $2.6 billion to its production-linked incentive scheme that supports domestic solar PV panel manufacturing.
Alongside China and India, the Asia-Pacific region also makes up significant amounts of solar panel manufacturing, especially modules and cells at 15.4% and 12.4% respectively.
While Europe and North America make up more than one-third of the global demand for solar panels, both regions make up an average of just under 3% each across all stages of actually manufacturing solar panels.
Too Little Too Late to Diversify?
China’s dominance of solar photovoltaic panel manufacturing is not the only stranglehold the country has on renewable energy infrastructure and materials.
When it comes to wind, in 2021 China built more offshore wind turbines than all other countries combined over the past five years, and the country is also the leading producer and processor of the rare earth minerals essential for the magnets that power turbine generators.
In its full report on solar panel manufacturing, the IEA emphasized the importance of distributing global solar panel manufacturing capacity. Recent unexpected manufacturing halts in China have resulted in the price of polysilicon rising to 10-year highs, revealing the world’s dependence on China for the supply of key materials.
As the world builds out its solar and wind energy capacity, will it manage to avoid repeating Europe’s mistakes of energy import overdependence when it comes to the materials and manufacturing of renewable energy infrastructure?
Energy
How Does U.S. Electricity Generation Change Over One Week?
This chart tracks U.S. hourly electricity generation over one week, with various sources producing electricity at different times of the day.
How Does U.S. Electricity Generation Change in a Week?
This was originally posted on the Decarbonization Channel. Subscribe to the free mailing list to be the first to see graphics related to decarbonization with a focus on the U.S. energy sector.
The U.S. has a dynamic electricity mix, with a range of energy sources generating electricity at different times of the day.
At all times, the amount of electricity generated must match demand in order to keep the power grid in balance, which leads to cyclical patterns in daily and weekly electricity generation.
The above graphic tracks hourly changes in U.S. electricity generation over one week, based on data from the U.S. Energy Information Administration (EIA).
The Three Types of Power Plants
Before diving in, it’s important to distinguish between the three main types of power plants in the U.S. electricity mix:
- Base load plants generally run at full or near-full capacity and are used to meet the base load or the minimum amount of electricity demanded at all times. These are typically coal-fired or nuclear power plants. If regionally available, geothermal and hydropower plants can also be used as baseload sources.
- Peak load or peaking power plants are typically dispatchable and can be ramped up quickly during periods of high demand. These plants usually operate at maximum capacity only for a few hours a day and include gas-fired and pumped-storage hydropower plants.
- Intermediate load plants are used during the transitory hours between base load and peak load demand. Intermittent renewable sources like wind and solar (without battery storage) are suitable for intermediate use, along with other sources.
Zooming In: The U.S. Hourly Electricity Mix
With that context, the table below provides an overview of average hourly electricity generation by source for the week of March 7–March 14, 2023, in the Eastern Time Zone.
It’s worth noting that while this is representative of a typical week of electricity generation, these patterns can change with seasons. For example, in the month of June, electricity demand usually peaks around 5 PM, when solar generation is still high, unlike in March.
| Energy Source | Type | Avg. Hourly Electricity Generation, MWh (Mar 07–14, 2023, EST) |
|---|---|---|
| Natural Gas | Fossil fuel | 175,967 |
| Nuclear | Non-renewable | 84,391 |
| Coal | Fossil fuel | 71,922 |
| Wind | Renewable | 50,942 |
| Hydro | Renewable | 28,889 |
| Solar | Renewable | 13,213 |
| Other | Mixed | 8,192 |
Natural gas is the country’s largest source of electricity, with gas-fired plants generating an average of 176,000 MWh of electricity per hour throughout the week outlined above. The dispatchable nature of natural gas is evident in the chart, with gas-fired generation falling in the wee hours and rising during business hours.
Meanwhile, nuclear electricity generation remains steady throughout the given days and week, ranging between 80,000–85,000 MWh per hour. Nuclear plants are designed to operate for long durations (1.5 to 2 years) before refueling and require less maintenance, allowing them to provide reliable baseload energy.
On the other hand, wind and solar generation tend to see large fluctuations throughout the week. For example, during the week of March 07–14, wind generation ranged between 26,875 MWh and 77,185 MWh per hour, based on wind speeds. Solar generation had stronger extremes, often reaching zero or net-negative at night and rising to over 40,000 MWh in the afternoon.
Because wind and solar are often variable and location-specific, integrating them into the grid can pose challenges for grid operators, who rely on forecasts to keep electricity supply and demand in balance. So, what are some ways to solve these problems?
Solving the Renewable Intermittency Challenge
As more renewable capacity is deployed, here are three ways to make the transition smoother.
- Energy storage systems can be combined with renewables to mitigate variability. Batteries can store electricity during times of high generation (for example, in the afternoon for solar), and supply it during periods of peak demand.
- Demand-side management can be used to shift flexible demand to times of high renewable generation. For instance, utilities can collaborate with their industrial customers to ensure that certain factory lines only run in the afternoon, when solar generation peaks.
- Expanding transmission lines can help connect high-quality solar and wind resources in remote regions to centers of demand. In fact, as of the end of 2021, over 900 gigawatts of solar and wind capacity (notably more than the country’s current renewable capacity) were queued for grid interconnection.
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