China has made a lot of solar panels, dramatically lowering prices and helping the country's clean-energy transition. The problem is that Chinese manufacturers seem to have made too many solar panels, according to the US, the European Union, and their allies.
China's solar-panel overcapacity is so bad that the China Photovoltaic Industry Association is calling for more mergers and acquisitions, as well as restrictions on domestic competition to control capacity, as it said in a post on its official WeChat account on Tuesday.
China has been on a solar-panel-installation blitz. Costfoto/NurPhoto/Getty Images China has produced an excess of solar panels, causing overcapacity issues domestically and abroad. The US, the European Union, and China are facing challenges because of the glut of solar panels.
The risks of a solar panel supply chain concentrated in China “is not only a geopolitical issue. It can be a fire in major facilities. It can be floods. Disruption of [the solar PV supply chain] has huge implications for our clean energy transition and energy security,” Birol said.
Chinese manufacturers are feeling the heat from solar-panel overcapacity, too. In March, Longi Green Energy Technology, the world's largest solar-cell manufacturer, announced it was laying off thousands of workers amid overcapacity and low prices.
“The world will almost completely rely on China for the supply of key building blocks for solar panel production through 2025,” the agency said in the report. “This level of concentration in any global supply chain would represent a considerable vulnerability.”