From pv magazine global
The International Energy Agency (IEA) has revealed that more than 30% of the integrated companies operating in the solar module manufacturing business worldwide are at medium or high risk of bankruptcy.
In the Special Report on Solar PV Global Supply Chains, the agency stressed that only 15% of these manufacturers are at high risk of bankruptcy and that in 2018 their share was around 28%. As for polysilicon suppliers, around 11% of them are currently at a high risk of bankruptcy, while another 49% are estimated to have a medium risk. “Owing to high polysilicon prices, the bankruptcy risk of polysilicon businesses dropped considerably in 2021,” the report reads. “A return to low polysilicon prices could, however, reverse this change.”
According to the IEA experts, the support that the Chinese government is awarding to polysilicon manufacturers in the form of financing and subsidies makes this market segment particularly vulnerable from a financial point of view. “For instance, the largest polysilicon company posted net losses between 2018 and 2020 despite government support,” they state without naming the producer. “From a security-of-supply perspective, consistently poor financial performance within and across the solar PV value chain reinforces supply chain vulnerability to bankruptcies and underinvestment, which can reduce its resiliency, raise prices and limit PV deployment.”
The agency warned about possible changes in subsidy regulations for the PV industry in China, claiming these may lead to higher bankruptcy risks, even for the most competitive manufacturers. “Should competitive companies go bankrupt, this could lead to broader price increases and supply impacts, in addition to loss of the subsidy,” the report says.
The paper also describes thoroughly the main vulnerabilities of the global PV supply chain while highlighting the need for a wide geographical diversification of the industry. “China has been instrumental in bringing down costs worldwide for solar PV, with multiple benefits for clean energy transitions,” the IEA analysts emphasize. “At the same time, the level of geographical concentration in global supply chains also creates potential challenges that governments need to address.”
According to their estimates, the world will almost completely rely on China for solar panel production through 2025. “Based on manufacturing capacity under construction, China’s share of global polysilicon, ingot and wafer production will soon reach almost 95%,” they note. China’s Xinjiang Province currently accounts for 40% of global polysilicon manufacturing, the report points out. “This level of concentration in any global supply chain would represent a considerable vulnerability; solar PV is no exception.”
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America has huge potential to take a firm grip on the future of PV and battery technology. We need leaders to see this potential and to act on it NOW, or we will continue to fall behind other world leaders in the solar industry.
If cheap global labor can’t make solar profitable, it really says is not an economically viable solution. Government subsidies then have to play a role to make it appear feasible, creating a politically divisive football.
Instead, we should concentrate our resources on nuclear. It has a 3X higher capacity factor (95%) for openers and with breeder reactors can produce unlimited fuel for a billion years.
It’s already in China’s future, why not ours?
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