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Context:

• Based on the current expansion plans, China will be responsible for 95 per cent of the entire manufacturing process by 2025.
• China became the leading manufacturer of PV panels for both residential and commercial usage in the last decade, surpassing Europe, Japan and the United States, who were earlier more active in the PV supply domain.

Details:

• According to the IEA, Xinjiang province of China is responsible for one out of seven solar panels manufactured worldwide.
• Furthermore, the report cautions governments and policymakers across the world to work against China’s monopolisation of the supply chain.
• The report identifies cost factor as the major reason deterring other countries from entering the supply chain.
• In terms of labour, overheads and the entire manufacturing process, China’s costs are 10 per cent lower compared to India. The whole production process is 20 per cent cheaper compared to the costs in the United States and 35 per cent lower than that of Europe. 
• However, the report ascertains that China’s hegemony over the supply chain will turn into a bigger problem when countries move towards net-zero emissions as it can exorbitantly increase the global demand for PV panels and the raw materials. 
• Solar PV’s demand for critical minerals will increase rapidly in a pathway to net-zero emissions.
• One example quoted by the researchers is the rising demand for silver which is required for solar PV manufacturing.
• The price of polysilicon, another important raw material to make PV panels, soared during the pandemic, when production decreased.
• The availability of wafers and cells, other key ingredients, exceeded demand by more than 100 per cent in 2021. 
• The report highlights potential incentives that the other countries could offer to establish PV supply chains of their own to reduce the unsustainable dependence on China.
• According to the IEA, countries across the world could start by directly subsidising various costs involved in solar PV manufacturing to improve business opportunities and accelerate their growth.
• IEA’s pointers to boost domestic PV production include lower taxes or import tariffs for imported equipment, providing investment tax credits, subsidising electricity costs and providing funding for labour and other operations.

Technology:

• Solar Photovoltaic:Solar photovoltaic (SPV) cells convert solar radiation (sunlight) into electricity. A solar cell is a semi-conducting device made of silicon and/or other materials, which, when exposed to sunlight, generates electricity.
• Solar thermal: Solar Thermal Power systems, also known as Concentrating Solar Power systems, use concentrated solar radiation as a high temperature energy source to produce electricity using thermal route.

https://www.downtoearth.org.in/news/energy/china-to-dominate-95-of-solar-panel-supply-chain-83651

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