The solar industry has seen a significant supply glut in European and American warehouses, according to the IEA. This is due to China’s dominance in global supply chains, with fierce domestic competition driving prices down. As a result, companies have been forced to cut costs, reduce staff, and increase exports of their inventories. The spot price of 182 millimetre “M10” solar panels, a commonly purchased size, has dropped 70% since the beginning of 2022.
Despite anticipated competition from the US, where subsidies are boosting green energy sectors, the expected impact has been overestimated. In 2021, Chinese exports of solar panels reached $30 billion, and the IEA predicts that China will continue to control 80-95% of global supply chains in the solar industry. Beijing’s strategic policies to drive down prices have solidified China’s dominance in this sector, making it difficult for Western competitors to keep up.
Last month, CubicPV, a company backed by Bill Gates, canceled plans to build a 10Gw factory in the US due to rule changes in 2023. The new rules allowed solar companies to receive support for American-made panels even if they contained overseas-made components, eliminating the need to establish US-based supply chains.
