Photo: Reuters But the panel makers have added capacity at a faster pace with the result that despite the country’s record-breaking installation of solar energy under its 2060 carbon neutral target, China’s solar panel sector is grappling with overcapacity.
A shortage of glass is causing production issues for new solar panels in China, which manufactures over 70 percent of the world’s solar panels.
China’s solar photovoltaic (PV) industry’s protracted battle with overcapacity may be drawing to a close, after years of bruising price wars and rapid capacity build-up plunged half the sector into the red, forcing closures and disrupting expansion plans, analysts say.
“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.”
Simply sign up to the Renewable energy myFT Digest -- delivered directly to your inbox. The International Energy Agency has warned that China’s dominance of the solar panel supply chain could slow the global transition to cleaner energy.
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.