It’s not uncommon to wonder whether solar panels are made. After all, that question can have an impact on whether solar panels are renewable and how solar panels help the environment. That’s due to a number of factors, including regulations and the impact of global trade.
Therefore, we’ll take a look at where most solar panels are made as well as the trends. For example, is the US a leader in solar panel manufacturing? If not, is that likely to change? Read on to find out.
Where Are Solar Panels Made?
There was a time when the US was considered a global leader in solar. That was mainly the case in the latter half of the 20th century. The first solar cells were created at Bell Labs in the early 1950s.
But the US is not manufacturing a large percentage of solar panels globally. As with most manufacturing capacity, the biggest producer by far is China. In fact, in 2019, China produced 71% of the world’s solar panels. In stark contrast, the US produced just 3% of the world’s solar panels.
After China, the second largest producer is Malaysia, but it only produces 9% of the global supply. Thus, it’s safe to say that everyone else is a footnote compared to China.
An EqualOcean analysis showed that in 2018, all of the top four solar manufacturers, plus number seven and number nine, were Chinese companies. Number five was a Canadian manufacturer. The US has just one manufacturer on the list at number 10.
Further, we can see that the other two companies at number eight and number six, are both in Asian countries. Clearly, the western world isn’t producing much of the world’s solar panel supply.
Still, the US and Germany are both in the top five for most solar capacity, meaning China is exporting quite a bit. China and Japan are in the top five for installed capacity, too.
In fact, China is going big on installed solar capacity. For example, they have built massive solar farms, including two that are shaped like giant pandas. That is both a nod to China’s culture and also a branding move, as they were built by Panda Green Energy.
However, the Chinese government dropped subsidies for building solar farms last year, leading to a decline in their construction. This has led to more rooftop solar panels in China instead.
Why Regulations Matter
As is the case with any industry, regulations are an important part of solar panel manufacturing. Hazardous materials are used during the process, and it’s important that those materials are handled properly.
As the Institute of Electrical and Electronics Engineers notes, a toxic compound is created during the refining of quartz called silicon tetrachloride. While this compound can be recycled, and most manufacturers do so, the reprocessing equipment can cost tens of millions. Due to that high price tag, many have thrown it out, causing it to get into waterways and soil.
This was the situation in the early days of solar panel manufacturing in China. In 2011, however, China passed a law requiring manufacturers to recycle at least 98.5 percent of silicon tetrachloride waste. But again, as IEEE points out in the article linked above, such laws require enforcement, and it is unclear how well that is being done.
Will the US Become a Major Player in Solar Manufacturing?
Whether the US will become a major player is yet to be seen. The Trump administration levied a 30% solar tariff on some solar cells, and the Biden administration has backed them. Tariffs are not a new concept; as we know, the idea is to incentivize companies to manufacture products domestically rather than import them.
Whether Trump’s tariffs were more about incentivizing domestic production or more due to has vendetta against China is anyone’s guess, but more manufacturing here in the US could be a good thing.
As the Harvard Business School’s Gary Pisano noted, sending solar production offshore could lead to a loss of innovation. This actually makes quite a bit of sense: if the US isn’t manufacturing, it probably isn’t innovating, either.
Although many people argue against tariffs generally, saying companies will just get their imports from countries that don’t have tariffs, that may prove difficult for solar panels. After all, China is still producing the vast majority of them globally. Thus, if importing them is too expensive, then domestic production may become a necessity.
Whether that will actually come to pass is anyone’s guess. However, more innovation is needed in order for solar energy to really take over. Increases in solar panel efficiency and decreases in cost would go a long way toward making that happen.
So, will the US go back to its industrial roots and seek to become the leader in solar panel manufacturing? That is yet to be seen, but it is a shift that would likely be welcome on the global stage.