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Visualizing China’s Dominance in the Solar Panel Supply Chain

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visualization of global solar pv panel manufacturing capacity by country/region.

China’s Dominance in the Solar Panel Supply Chain

Many governments are investing in renewable energy sources like solar power, but who controls the manufacturing of solar photovoltaic (PV) panels?

As it turns out, China owns the vast majority of the world’s solar panel supply chain, controlling at least 75% of every single key stage of solar photovoltaic panel manufacturing and processing.

This visualization shows the shares held by different countries and regions of the key stages of solar panel manufacturing, using data from the International Energy Agency (IEA).

Solar Panel Manufacturing, by Country and Stage

From polysilicon production to soldering finished solar cells and modules onto panels, China has the largest share in every stage of solar panel manufacturing.

Even back in 2010, the country made the majority of the world’s solar panels, but over the past 12 years, its average share of the solar panel supply chain has gone from 55% to 84%.

China also continues to lead in terms of investment, making up almost two-thirds of global large-scale solar investment. In the first half of 2022, the country invested $41 billion, a 173% increase from the year before.

Country/RegionSolar Panel DemandAverage Share of Solar Panel Manufacturing Capacity
China36.4%84.0%
Europe16.8%2.9%
North America17.6%2.8%
Asia-Pacific13.2%9.1%
India6.9%1.3%
Rest of the World9.1%0.8%

Source: IEA
Note: Percentages may not add up to 100% due to rounding

After China, the next leading nation in solar panel manufacturing is India, which makes up almost 3% of solar module manufacturing and 1% of cell manufacturing. To help meet the country’s goal of 280 gigawatts (GW) of installed solar power capacity by 2030 (currently 57.9 GW), in 2022 the Indian government allocated an additional $2.6 billion to its production-linked incentive scheme that supports domestic solar PV panel manufacturing.

Alongside China and India, the Asia-Pacific region also makes up significant amounts of solar panel manufacturing, especially modules and cells at 15.4% and 12.4% respectively.

While Europe and North America make up more than one-third of the global demand for solar panels, both regions make up an average of just under 3% each across all stages of actually manufacturing solar panels.

Too Little Too Late to Diversify?

China’s dominance of solar photovoltaic panel manufacturing is not the only stranglehold the country has on renewable energy infrastructure and materials.

When it comes to wind, in 2021 China built more offshore wind turbines than all other countries combined over the past five years, and the country is also the leading producer and processor of the rare earth minerals essential for the magnets that power turbine generators.

In its full report on solar panel manufacturing, the IEA emphasized the importance of distributing global solar panel manufacturing capacity. Recent unexpected manufacturing halts in China have resulted in the price of polysilicon rising to 10-year highs, revealing the world’s dependence on China for the supply of key materials.

As the world builds out its solar and wind energy capacity, will it manage to avoid repeating Europe’s mistakes of energy import overdependence when it comes to the materials and manufacturing of renewable energy infrastructure?

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Energy Shift

What Electricity Sources Power the World?

Coal still leads the charge when it comes to electricity, representing 35% of global power generation.

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Electricity-Sources-by-Fuel-in-2022

What Powered the World in 2022?

In 2022, 29,165.2 terawatt hours (TWh) of electricity was generated around the world, an increase of 2.3% from the previous year.

In this visualization, we look at data from the latest Statistical Review of World Energy, and ask what powered the world in 2022.

Coal is Still King

Coal still leads the charge when it comes to electricity, representing 35.4% of global power generation in 2022, followed by natural gas at 22.7%, and hydroelectric at 14.9%.

Power by fuel

Source: Energy Institute

Over three-quarters of the world’s total coal-generated electricity is consumed in just three countries. China is the top user of coal, making up 53.3% of global coal demand, followed by India at 13.6%, and the U.S. at 8.9%.

Burning coal—for electricity, as well as metallurgy and cement production—is the world’s single largest source of CO2 emissions. Nevertheless, its use in electricity generation has actually grown 91.2% since 1997, the year when the first global climate agreement was signed in Kyoto, Japan.

Renewables on the Rise

However, even as non-renewables enjoy their time in the sun, their days could be numbered.

In 2022, renewables, such as wind, solar, and geothermal, represented 14.4% of total electricity generation with an extraordinary annual growth rate of 14.7%, driven by big gains in solar and wind. Non-renewables, by contrast, only managed an anemic 0.4%.

The authors of the Statistical Review do not include hydroelectric in their renewable calculations, even though many others, including the International Energy Agency, consider it a “well-established renewable power technology.”

With hydroelectric moved into the renewable column, together they accounted for over 29.3% of all electricity generated in 2022, with an annual growth rate of 7.4%.

France’s Nuclear Horrible Year

Another big mover in this year’s report was nuclear energy.

In addition to disruptions at the Zaporizhzhia nuclear power plant in Ukraine, shutdowns in France’s nuclear fleet to address corrosion found in the safety injection systems of four reactors led to a 4% drop in global use, year-over-year.

The amount of electricity generated by nuclear energy in that country dropped 22% to 294.7 TWh in 2022. As a result, France went from being the world’s biggest exporter of electricity, to a net importer.

Powering the Future

Turning mechanical energy into electrical energy is a relatively straightforward process. Modern power plants are engineering marvels, to be sure, but they still work on the same principle as the very first generator invented by Michael Faraday in 1831.

But how you get the mechanical energy is where things get complicated: coal powered the first industrial revolution, but heated the planet in the process; wind is free and clean, but is unreliable; and nuclear fission reliably generates emission-free electricity, but also creates radioactive waste.

With temperature records being set around the world in the summer, resolving these tensions isn’t just academic and next year’s report could be a crucial test of the world’s commitment to a clean energy future.

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Energy Shift

How Mine Permitting Delays Impact the Transition to a Green Economy

Currently, the U.S. has a backlog of more than 280 mining projects awaiting permits.

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Mine Permitting Delays and the Transition to a Green Economy

Minerals are essential components in many of our daily-use products, such as cell phones, laptops, and cars.

In fact, every American uses nearly 40,000 pounds of newly mined materials each year.

In the United States, however, the current permitting process makes it difficult for businesses to invest in the extraction and processing of minerals, such as copper.

This graphic by Northern Dynasty explores the untapped potential of mineral resources in America.

Copper, a Critical Material

In 2023 the U.S. Department of Energy officially added copper to its critical materials list, following the examples of the European Union, Japan, India, Canada, and China.

Copper is a highly efficient conductor of electricity and is considered vital for clean energy technologies such as solar, wind energy, and electric vehicles.

Green energy-related copper demand is expected to increase by nearly 600% by 2030. In this scenario, the copper market could see an annual deficit of up to about 1.5 million tonnes by 2035.

Copper demand, per year, from green sectors

Despite having more than 53 million tons of copper reserves, the U.S. imports 45% of its copper from other countries.

This is the highest level of import reliance in over 30 years. One of the biggest reasons for this is the country’s mine permitting process.

A Rigorous Mine Permitting Process

Mines are large-scale projects that demand extensive research and policies. As a result, mining projects can take 16 years, or more, to start production.

Currently, the U.S. Bureau of Land Management—which regulates land use in the country—has a permitting backlog of more than 280 mining projects.

In addition, environmental activists have adopted a “not in my backyard” stance towards domestic mining. As a result, companies have often had to resort to litigation to make any progress in the permitting process.

“Activists have weaponized the government bodies that are essential to the safe and responsible development of domestic mines,” says Michael Westerlund, VP Investor Relations at Northern Dynasty Minerals.

The company owns the largest undeveloped copper deposit in the world, named Pebble, in Alaska. Pebble and other five major copper projects totaling over 11 billion tonnes in copper resources have been delayed because of the Federal permitting process.

The Largest Undeveloped Copper Deposit in the World

The Pebble Project has been through a roller coaster of regulatory activity for the past 15 years.

Recently, the U.S. Environmental Protection Agency banned the depositing of mining waste near the mining project in Alaska, citing potential harm to the local sockeye salmon industry.

However, the veto directly contradicts findings from the Federal government that concluded that mining and fishing could coexist in the region.

“Alaska does resource development better than any other place on the planet, and our opportunities to show the world a better way to extract our resources should not be unfairly preempted by the Federal Government”
–Alaska Governor Mike Dunleavy

Projects like Pebble can provide significant economic benefits and support the U.S. transition to a greener future. With the current regulatory uncertainty for U.S. developers, where the much-needed supply of copper will come from is unknown.

Click here to learn more about Pebble.

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