China is poised to dominate the global solar manufacturing landscape, with more than 80% of the world’s polysilicon, wafer, cell, and module manufacturing capacity expected to be in its hands from 2023 to 2026. This insight comes from a report by Wood Mackenzie titled “How will China’s expansion affect global solar module supply chains?” The country’s remarkable investment of over $130 billion in the solar industry in 2023 has been a driving force behind this expansion.
China’s growth in solar manufacturing has been facilitated by its high margins for polysilicon, technology advancements, and local manufacturing efforts abroad. Despite policies promoting local manufacturing in other markets, China’s cost-competitive production still overshadows its competitors. A module made in China is reported to be 50% cheaper than those produced in Europe and 65% cheaper than in the US.
The global solar industry will continue to witness China’s dominance, driven by advanced technology, lower costs, and a complete supply chain. While overseas markets, including the US and India, have ambitious expansion plans, they will remain dependent on China for wafers and cells in the coming years.
China’s commitment to building over 1,000 GW of N-type cell capacity, a next-generation technology, further solidifies its global leadership position. India is projected to surpass Southeast Asia as the second-largest module production region, primarily due to its Production Linked Incentive (PLI) program.
However, oversupply and intense competition, especially in older, less efficient production lines like P-type and M6 cells, are affecting expansion plans. More than 70 GW of capacity in China has been terminated or suspended in the past three months, putting pressure on module manufacturers to adapt to market conditions.