Chart: Which country dominates the solar supply chain?

China maintains an iron grip on every stage of solar manufacturing, from raw polysilicon to finished solar panels.
By Maria Virginia Olano

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Image of a solar manufacturing facility with gloved hand with the words "chart of the weeK" superimposed
(Ryan Pyle/Getty Images)

Canary Media’s chart of the week translates crucial data about the clean energy transition into a visual format.

China has deployed a little more than one-third of the solar photovoltaic capacity in the world, but it controls a much larger share of the solar supply chain, according to a report released earlier this year by the International Energy Agency. At the end of 2021, China was home to 79 percent of global capacity for manufacturing polysilicon, the key raw material for producing solar modules, as well as a whopping 97 percent of capacity for producing solar wafers, 85 percent for solar cells and 75 percent for finished solar modules or panels.

The following illustration shows the key stages of solar PV manufacturing. China controls the market for all of them.

the solar manufacturing process is shown. The sequential stages are polysilicon, ingot, wafer, cell, panel/module

Since 2011, China has invested more than $50 billion in developing its solar manufacturing capacity and created as many as 300,000 jobs in the sector, according to the IEA. Those investments have led to China’s global dominance, pushing Europe, Japan and the U.S. out of the market, and they have been a key driver of the cost reductions in solar components over the past decade. China also controls much of the supply chain for key minerals and metals needed for PV panels.

China’s domination of solar manufacturing is linked to serious human-rights violations. The IEA estimates that 42 percent of the world’s polysilicon is produced in China’s Xinjiang province, where the Uyghur Muslim minority has been abused and repressed by the Chinese government, and where solar PV manufacturers are alleged to have participated in government-sponsored forced-labor programs that exploit the Uyghur population. This summer, a U.S. law went into effect requiring American companies to ensure none of their imported panels are made using Uyghur forced labor.

The IEA report concludes that diversifying supply chains is key to continuing solar growth in coming years, and government policies are crucial to making that happen. In the U.S., incentives in the Inflation Reduction Act are expected to boost domestic manufacturing capacity for solar components as well as increase solar installations. But the U.S. has a lot of catching up to do. In 2021, it manufactured just under 5 gigawatts of solar panels domestically out of the nearly 200 gigawatts produced globally.

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Maria Virginia Olano is chief of staff at Canary Media.