China is considering an export ban on solar wafers as the country is responsible for 97% of the global output of the clean-energy product.
- China is the leading supplier of a crucial piece in making solar panels—solar wafers. The country supplies 97% of the wafers worldwide.
- To protect the country’s dominance in the solar market, China is considering putting an export ban on the product.
- China has spent years perfecting the wafers to bring the cost of solar panels down by nearly 90%. If the country bans the export of the product, it will increase prices elsewhere, leaving China’s panels to be the best and cheapest option.
Why it’s news
China is attempting to protect its dominance in the solar industry by placing a ban on its solar wafers.
The country has spent a large amount of time and money to create new wafers that are smaller and thinner to bring down the cost of solar panels considerably. Banning the exportation of wafers allows China to have the cheapest option for solar panels leaving the country ahead of its competition.
“Beijing and the market leaders in China’s solar industry are undoubtedly worried about efforts from the US, EU, and India to develop homegrown solar manufacturing industries, so these recent tech export controls may very well be a response,” says Cosimo Ries, an analyst with Trivium China. “Beijing is looking to slow down the speed at which its competitors can develop their own supply chains.”
China isn’t the first country to attempt to phase out others and be ahead of the competition.
Many countries, including the U.S., have attempted to create more products internally and block out China. The U.S. has begun focusing on chip production, which China has been the leader of for many years.
The U.S. has begun pouring billions of dollars into internal chip production, allowing for prices of the technology to go down and the country to no longer rely on China for the chips, essentially phasing the country out and allowing the U.S. to be the forerunner in production.
Now, China is following suit by taking a product that it is the number one supplier of and placing a ban on it so that it remains in the top spot.
The ban on solar wafers is still in the public consultation phase, and no decision has been made yet on if the country will follow through with the ban.