The report “Reconfiguring Globalisation: A Review of Tariffs, Industrial Policies, and the Global Solar PV Supply Chain” by The Oxford Institute For Energy Studies summarises:
• The trade war of the early 2010s on solar PV initiated by the US and European Union (EU) triggered a major wave of bankruptcies in China that proved to be a temporary setback for the industry. China’s efforts to stimulate domestic PV deployment sustained the industry’s growth and drove rapid cost reductions for Chinese-manufactured modules. To circumvent Western tariffs, Chinese firms relocated a modest proportion of downstream capacity to Southeast Asia.
• Consequently, growing cost disparities between Chinese and Western products, coupled with frequent tariff circumvention practices, undermined the efficacy of the Western tariff regimes. Ultimately, tariffs failed to deliver any meaningful development in the US and European solar manufacturing sectors.
• Policy interventions and geopolitical alignments recently have significantly redirected investment flows, as evidenced by corporate announcements. Heightened trade tensions and geopolitical rifts have spurred Chinese firms to invest in Southeast Asia and the Middle East. Similarly, the IRA led to a surge of inbound reshoring investments by Western and domestic manufacturers.
• China’s competitive advantages in mass manufacturing make it the most cost-effective location for solar PV equipment manufacturing. Moreover, China already maintains a lead in crystalline silicon (c-Si) technologies. While the US partly shielded its domestic market from Chinese imports with a complex tariff regime, it bears almost triple the global price for solar panels and twice the investment costs of China for its PV manufacturing.
• The surge in China’s PV manufacturing overcapacity presents an irreconcilable dilemma for the rest of the world (ROW) in the coming years.
Access the report here
